Tornadoes, hurricanes and other weather-related disasters have had a huge impact on the insurance landscape, Mississippi Insurance Department Director of Consumer Services Andy Case told the Columbus Rotary Club Tuesday afternoon.
Case joined the department in 2010 after serving more than 20 years in the insurance industry.
While the state isn’t seeing more storm claims, it is seeing more severe weather events hitting the same places, he said.
“We’re seeing a lot of convective weather in the same areas, and that’s concerning,” he said. “If you look at the areas below I-20 and the Highway 84 corridor, there’s a lot of tornadic activity.
Case said he didn’t know of another year when there was a tornado in every county.
“We’re number one in the country right now for tornado activity,” he said. “You think about Oklahoma and Kansas, but they are number one for EF-4 and EF-5 tornados. We’re number one for total tornado counts. I think we had 109 last year. It was a very busy year.”
There are a lot of options for buying insurance now, but Case said the best plan is to stick with using an agent instead of trying to go it alone.
“There’s just so much that consumers don’t understand, and there may be some coverage or protections that they’re missing,” he said. “We tell people to use an agent and tell them what your needs are and let them help you with the risk analysis.”
One area where consumers might find themselves in the lurch is in the aftermath of a named storm, he said. “Named storm deductibles” were introduced after Hurricane Katrina, and they basically make the deductible a percentage of the value of the property.
“That applied for Hurricane Zeta,” he said. “If you’ve got a 5 percent, 10 percent, 15 percent deductible, you’re effectively underinsured. I would say roughly 52-55 percent of the claims reported in the lower three counties were denied because the damage was under the deductible.”
The “long tail” of the COVID-19 pandemic is making itself felt when it comes to home repairs, but also affects seemingly unrelated areas like auto insurance. Both are heavily reliant on the supply chain for materials.
“We have seen materials for roofing supply go up about 22 percent on the coast right now,” he said. “We had people on a waiting list to get their roof repaired, and by the time they got around to it the cost of materials had gone up 20 percent. We’re seeing that across the board. There’s no way that can happen and not have some pressure on pricing.”
Despite national pressure for auto insurers to give more rebates, the costs for the industry continue to be pushed up, he said.
“Supply chain disruptions are causing problems in the auto insurance industry,” he said. “When you put your vehicle in the shop, it sits there and waits for a part. That person is then in a rental car for that amount of time that someone is having to pay for. Insurers are having to pick up the tab for that. Even though we’re in the tail end of COVID, they are still paying more now because of ongoing issues.”