A Tupelo resident walks by a home partially crushed by a downed tree on North Green Street on Monday, May 3, 2021. The roots of the tree tore out the decking and stairway to the home after an EF-1 tornado passed through the city Sunday night.

A Tupelo resident walks by a home partially crushed by a downed tree on North Green Street on Monday, May 3, 2021. The roots of the tree tore out the decking and stairway to the home after an EF-1 tornado passed through the city Sunday night.

As more and more natural disasters strike Mississippi, how is this vulnerability to climate change reshaping property and casualty insurance? Insurers and property owners are wondering what the future holds. Two state veterans of the insurance industry share their thoughts on this timely issue.

Amy W. Smith, executive vice president/commercial lines manager with Ross Yerger, says there is no question that insurance carriers are seeing an increase in weather-related claims such as wildfires, tornados and hurricanes.

“Climate change impacts storm frequency, storm frequency increases claims, claims frequency and severity is going to impact carriers' stability and their desire to write in Mississippi or any other state with increased natural disaster activity,” she said. “With this outlook for the entire country, you might see stricter building codes such as fortified home construction.”

But stricter codes may not be the only thing increasing as higher costs lead to higher premiums.

“Not only are we seeing increased premiums now, we are also seeing higher deductibles, wind/hail deductibles added, coverage limitations, insured to value increases along with more restrictions on roofs,“ Smith said.

“For the past few years, the insurance industry has seen a high increase in catastrophic weather-related claims from wildfires in California, multiple hurricanes in Louisiana and tornados in the Midwest. With climate changes, those types of claims will continue to happen and probably at a higher frequency. You will continue to see carriers use predictability modeling for underwriting (that will continue to be updated as our climate changes), coverage changes/limitations, and increased premiums to help alleviate the higher risk exposures.”

Angelyn Treutel Zeringue, president, SouthGroup Insurance, also predicts higher premiums.

“With the recent spike in inflation, construction costs, labor costs, lawsuits, and claims expense, we are seeing increased pressure on insurance rates, even for those who did not file a claim,” she says. “Our Mississippi Insurance Department works well with the insurance companies to ensure that they are being treated fairly with adequate rates, and that the companies are treating consumers fairly and in compliance with their insurance contracts.

“Nothing stays the same, and prices for every industry are increasing, but through mitigation, pride of ownership, and a strong supply of insurance companies, consumers have options for their coverage and pricing.”

Zeringue recommends shopping your insurance every three years to be sure you have the best available rate, but not to shop every year because you will lose out on loyalty credits. Bundling home and auto with the same agency may help, and there may be deductible buy-downs available to assist with the higher deductibles being mandated by the insurance companies.

Smith recommends that property owners use an independent agent who can advise as well as give access to multiple insurance carriers.

Zeringue also points out that Mississippi is diligently working to mitigate damage from flooding and wind exposures.

“Our building codes are strict, and we are building stronger and smarter,” she said. “Hurricanes are a wildcard, because they are unpredictable, but this is nothing new for our area.”

She says insurers are providing policy credits for homeowners adding mitigation for the protection of their property, and they add credits for the use of smart-devices that provide an early warning alert for water or smoke damage to reduce damage.

“Central alarms for fire and break-ins also receive credits,” she said. “Roofs that were promised a 30 year life when installed are failing in record numbers, and companies offer a steep discount for a new roof. Consumers need to review their policy’s coverage level to confirm they have an adequate replacement cost estimated for their home and that they are insured properly.”

“Companies providing the lowest rates are requiring tree limbs to be cut back at least three feet from the home, handrails on stairs, removal of liability hazards from the property, repair of any existing damage, and in some cases, they are requiring an old roof to be replaced or the deductible could be five percent or higher,” Zeringue said. “Trampolines and vicious dogs are a liability hazard and cost more to insure. Having a good credit history and low number of claims on your record also help you get a better rate.”

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