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Bad Weather Risks
It doesn't matter which side of the political debate is right about global warming or, if you prefer, climate change. The Democrats think it real and want to force us to change the way we live our lives. The Republicans are out to protect business from the need to make any changes to the way it generates our power or manufactures whatever we need. This debate doesn't matter too much because the insurance industry has already decided the weather is changing. It believes in statistics. We might remember what happened last week or last month but, after that, everything blurs together into broad patterns where we think it might have rained more or less. With high quality records going back decades, insurers don't have to guess. They know the average rainfall by ZIP code over the entire country. OK, so that's a slight exaggeration. But they can give you hourly reports from whichever areas have weather stations.
Taking this year, you will have seen the headlines. This has been the worst year for tornadoes for decades. Had it not been for the early warning systems, we might have had more people die than at any other time. Not ...
... that there's ever any good news about tornadoes, but the insurance industry has been reassuring people there will be no immediate increases in premium rates when your insurance policies come up for renewal. On average, it takes three to five years for weather-related events to have a direct effect on rates. The reason is simple. You may see the disaster on TV now, but it takes weeks and months for the claims to come in. People have to get estimates for repairs and collect evidence of losses. The claims departments work on all these claims. Some they pay immediately. Others may require investigation. There are disputes. It can be a year before you have a reasonably good valuation of all the losses. Then you have to decide whether this is part of a trend of rising losses to justify a rate increase.
Why are we talking about this? Let's look at just one tornado, the one that killed 130 people in Joplin, Missouri. If you watch the coverage on TV, there was wreckage everywhere. Well, some 18,000 vehicles were damaged. Even now, there are wrecks on street corners. People are still focussed on clearing the sites to rebuild their homes. The insurers report more than 9,000 claims on comprehensive policies. Most of them are for total loss. To put this in a context for you, experts estimate the losses from Joplin will top $2 billion. So if you are the proud owner of one or more vehicles, look around you. How many times have you been flooded? What's the record for hurricanes and tornadoes? Are you always going to be able to escape forest fires (made worse because of the lack of rain)? If you get too much rain, what are the risks of mudslides?
Depending on the answers, you might want to get auto insurance quotes for comprehensive cover. This will pay out if your vehicle is lost or damaged as a result of weather events. Before you buy, check whether there are limitations or exceptions. If there are, get new sets of auto insurance quotes until you find the cover you most need.
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