Massachusetts homeowners are increasingly facing insurance nonrenewals, despite seeming to be one of the safest states in the country when it comes to natural disasters.
What's happening?
Surveys from 2023 found that insurance companies opted not to renew 1.51% of Massachusetts homeowner policies, which is up from 1.18% five years earlier, reports the Boston Business Journal.
"The state isn't necessarily one of the riskiest areas of the country, so in that sense it's surprising. It's also a relatively wealthy area, so the fact that insurers are dropping customers is also a little surprising," assistant professor of finance at Harvard Business School Ishita Sen told Boston Business Journal.
Massachusetts homeowners are facing these nonrenewals, however, because of the increasing effects of rising global temperatures on the area.
The Massachusetts state senate's office explained in a report, according to the Boston Business Journal, "The data released with this report demonstrate climate change is beginning to upend insurance markets around the country … as the counties that are most exposed to climate-related risks such as wildfires or hurricanes are the counties seeing the highest nonrenewal rates."
In 2023 alone, there were eight weather-related "catastrophe events," resulting in $892.3 million in property losses.
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Cape Cod, which is the part of Massachusetts' geography that extends into the Atlantic Ocean, has seen a large portion of the nonrenewals. Due to its geography and weather patterns, the region is especially vulnerable to more violent storms, flooding, and the growing risk of a hurricane landfall.
Megan Wright, owner of Wright Insurance Agency in the Cape Cod town of Yarmouth, said in a statement, "No doubt, a nonrenewal is a tough pill to swallow."
Why is the rise in homeowner insurance nonrenewals important?
The rise in weather-related events in the New England region is a direct cause of an increasing number of homeowners' insurance policies being denied to residents.
Human activities, like the burning of dirty energy, are causing massive global overheating, which results in unpredictable weather events.
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Do you think your house could withstand a hurricane? Click your choice to see results and speak your mind. |
No way 😨 If these bad practices persist, other regions around the globe will continue to see weather events that are unusual and unpredictable.
What's being done about insurance nonrenewals?
Several large industries and businesses are taking steps toward safer and cleaner business practices that involve less dirty energy and more clean, renewable energy.
This past October, 32 of the world's leading utility companies announced that they would invest more than $116 billion annually into clean energy technologies.
As more clean energy solutions continue to be discovered and implemented, experts are optimistic that the world can combat rising global temperatures and extreme weather. With the increasing amount of heat-trapping gases in our atmosphere, it's important to adopt clean energy initiatives that will spark real change.
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