What Could Climate Change Do to Commercial Insurance?

Climate change has been a hot button issue for a while now, and the debate is only getting worse. While NASA scientists are still working on the culprit, recent disasters have been a direct influence on a rise in insurance rates

activists raising a sign for climate change
Both climate change and insurance are difficult topics to discuss. We need concrete facts to move forward.

Basically, our weather seems to only get hotter each year, causing more intense storms, and while the rates slowly climb, people can only pay for so much. With insurance needed more than ever, we are left to wonder how it will play out.

Global Warming 

Scientists create future climate models to predict the weather. Research like this can help save lives by warning people before storms even form.  With these studies, scientists find that greenhouse gases are the most rational culprit for the storms we’ve seen. 

With more gas in our atmosphere, scientists predict that the planet’s overall temperature will rise. Everything besides the greenhouse gas evidence is just conjecture. However, future predictions lean towards stronger winds, bigger storms, and increases in droughts. Areas like the continental US are already feeling the effects.

While the temperature is what we have evidence for, storms are the main issue here. Global warming will decrease the temperature difference between the poles and the equator, causing a decrease in storm formation. These findings are from research at both Columbia University and NASA’s Goddard Institute for Space Studies. At first, this seems like good news.

view of hurricane forming from space
Hotter temperatures mean more intense storms and more intense storms mean more damage.

However, with the temperature changes come more water vapor. As our atmosphere becomes more humid, the number of powerful storms rises. This means we may see less rainfall, and when it does come, it’ll be more on par with catastrophic weather patterns.

Hotter temperatures will also increase hurricane ranges as the weather creates an easier travel route for the storms. More places inland and higher from the equator are affected by the terrible storms, and they won’t be ready for them like currently affected zones.

One other effect of the temperature rising is coastal flooding. Melting ice caps and glaciers can cause a rise in sea-level, terrorizing a coastal populace. While it is still a theory under inspection, the research is strong enough for insurance companies to start looking into risk management.

Our Insurance Costs

Traub Lieberman Straus & Shrewsberry LLP and Aspen Re recently published a white paper detailing current issues for the insurance industry involving climate change. They’ve found that 2017 was the most expensive year for insurance companies involving catastrophic weather.  Loss estimates, they claim, totaled $140 billion that year. 

Overall temperature increases for the future, even of just 1℃ could rocket these loss estimates even higher. Their 3.7℃ prediction as the extreme would see totals climbing to $551 trillion.

Rostin Behnam, sitting on the Commodity Futures Trading Commission, plans on forming a panel of experts to address these issues. However, studies for how these issues affect our financial sector have been put on the backburner as our current administration ignores the scientific empirical evidence.

What Can We Do?

Like most overhead issues, we must keep them at hand. For these rising insurance costs, California already feels the damages from its recent terrible wildfires, and Texas with the flooding issues affecting the Houston area. These are only small disasters compared to America at large and even the globe. Really, the only thing at a personal level someone can do for global warming is turning to a vegan diet or recycling.

save our planet sign held by an activist
Activism is a great way to spread awareness, but make sure you’re educated with the latest information.

We need to understand how the market affects our policies. As catastrophic storms increase, so do damages to people’s homes as well as medical expenses. Our government handles most widespread insurance policy changes.

So, the only task we can do as citizens is to pay attention to whom we are electing, and make sure that our representatives understand the current insurance crisis. You can call or email your representative so that they know this is an issue for their constituents.  

Bottom line: We may have skyrocketing insurance claims and the companies may not have the capital to pay it off. We must keep up to date with current insurance laws and work with the companies to write better legislation.

Business Insurance Costs That’ll Keep You Up at Night

Insurance costs can surprise you, and purchasing policies for your company can run into stormy waters. With a good understanding of the costs and ways to save money, you can sail your company’s ship straight to profitable seas. Insurance costs, or those “life happens” moments, crop up when you least expect them. Proper planning will alleviate the strain these cause.  The average company spends about $1300 on policies, but plan prices are increasing steadily for years. Don’t let unknown factors cost you capital.

stack of insurance folders for a business
The information n insurance costs can really stack up. We’ve got these easy outlines for you to follow.

 

 

When it comes to insurance for your business, certain forms of coverages are mandatory like Worker’s Compensation, but you should be aware of what will raise your costs, and where are the places you can save money.

 

Cost-Raising Factors

Different things influence your final price. Learn them now:

 

  • History of claims – Your company’s past will be brought up at some point from the insurance perspective. If you have past claims, make sure you are up to date on them and still have their information.
  • Profit Margin – Your final sales numbers will be taken into account. These directly affect how much coverage you need plus your ability to afford it. If you have a high-profit margin, you’ll want to protect your interests.
  • Physical Property – If you have a physical site with assets, this will directly affect your Business Owner’s Policy. Remember, a larger building will require more coverage.
  • Physical Location – Different states have different insurance laws, and some have scarier premiums. Your physical location will be a big determining factor across the board.
  • Employee Number – Whether you’re self-employed or have a staff, this number dictates when and why you need coverages like Group Health insurance.

financial analysis of business
Technology can help out too. There’s an app pretty much everything out there.

Of course, take your business’s specific needs into account, but those vary widely based on industry. Your insurance liaison (known as an actuary) will calculate your risks before offering you different options and their price. Now, how can you reduce these costs?

 

Places to Save Money

 

Here is the good news. There are many ways for you as a business owner to cut your expenses. Take these three factors into account:

    1. Deductibles – When tax season comes about, this is the best time to minimize the payment you are expected to make. Write everything down during the year, including claim payments, so that they count toward a lower final number. Remember, business expenses count towards a tax refund.
    2. Bundling – Grouping things like policies together can save time and money. Often, an insurance company will offer a better deal if you’re willing to only purchase your policies with them. Consider your options when doing this, because it’s a lot less stressful to only look in one place for your information.
    3. Refreshing your info – New updates happen in the insurance industry all the time, and your business should also be constantly evolving. If you set one price down for yourself, you may lose out on a better option later. If nothing else, calling your provider and updating your company’s information may give them a better perspective on how they can help you in the future. New coverage may arise that they didn’t know they could offer you.

 

 

Coverage comes with responsibility. As a business owner, it’s your job to make the best choices to grow. Your employees and customers are counting on you. With these factors in mind, you can look into where to best allocate your assets. However, everyone can use a helping hand, especially when the industry is as complicated as insurance. 

tax incentive form and other business insurance paperwork plus a blue mouse, pen, and cup
Keeping track of everything can be exhausting. Make sure to keep accurate documentation and get help when you need it.

 

EZ.Insure is ready to be that helping hand. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing replies@ez.insure or calling 888-998-2027. EZ.Insure makes the entire process easy, and quick.