Experts urge focus on hardening homes

An article published today in Insurance Business America (IBA) makes the case for hardening properties against climate related losses.
 
“If risks are better – more hardened – then they’re better risks for insurers,” said Michael Korn, national property practice leader at EPIC Insurance Brokers & Consultants. “So I think insurers need to help their insureds before losses happen. So, getting out there and helping them harden properties that are in wildfire areas or hurricane areas or earthquake areas – all those things can be helped before losses ever happen. That’s going to improve the capacity available for those clients, as well as reduce pricing,” he said.

IBA notes that currently, 38% of homes in the US were built before 1970, and the median age of homes in the country is 40 years, according to a report by Fortune Magazine.

“Oftentimes, underwriters are pricing off a statement of values and certain sets of data that are pretty myopic in nature and don’t capture the actual quality of the asset,” said Fred Zutel, president of property and casualty at Lockton. “For example, if a building is from 1970 but the roof, the windows and other portions of it have been rehabbed, some of those buildings aren’t necessarily getting the commensurate credit and are being rated as an older structure – even though they might actually be more hardened than a newer building.”

The full article is available here:

Source: Insurance Business America, https://www.insurancebusinessmag.com/us/news/catastrophe/think-of-insurance-as-a-last-resort-482111.aspx