Some industry experts predict the recent hurricanes will translate into higher insurance premiums for some policyholders.
“Rates are just going to go up across the board,” said Bill Bailey, managing director for Hurricane Insurance Information Center, an industry group established in Mississippi after Hurricane Katrina.
Hurricanes Katrina and Rita are estimated to cost the insurance industry be- tween $44 billion and $67 billion. These losses, coupled with rebuilding costs, have the greatest potential to contribute to higher premiums in areas affected by the storms.
But insurance companies also expect to face rising reinsurance premiums, which would be the main force driving up prices for policyholders throughout the country, according to Gary Thompson, an attorney who specializes in representing policyholders with insurance complaints.
Shelter Insurance executive Joe Moseley said the hurricanes won’t directly affect premium costs but didn’t know what affect other costs would have.
“You never say to people that prices are definitely going to stay the same,” he said.
Tia Lindell, a spokeswoman for State Farm Insurance, said the company hasn’t made cost estimates related to the disaster yet and didn’t know what affect the costs would have on future premiums.
“It is fairly early in the game to know what is going to happen,” Bailey said. “But more than likely people will be paying higher premiums on their cars next year.”