U.S. state regulators approved about 1,500 requests to raise rates for policies that protect homes last year, according to data compiled by Perr & Knight, a Santa Monica, California- based consulting firm that tracks the records. That adds to more than 3,700 in the prior two years. Companies must seek approval from states to make most changes on policies sold to consumers.
Allstate, based in Northbrook, Illinois, has also moved to change terms of some policies. The insurer started a program in Oklahoma that limits payouts for customers' with older roofs, Wilson said at an investor conference in December.
Some carriers in Georgia have refused to cover homes with roofs older than 10 years, said Victor Hamby, a partner at Hamby & Aloisio Inc., an independent insurance agency in Atlanta. His clients faced rate increases averaging about 18 percent last year and he expects them to continue rising this year and next. He attributes the increases to underwriters needing to recoup losses and a new state insurance commissioner who has sped up the process for approving rate changes.
"The underwriting standards have really tightened up," he said in a phone interview last week. "It's not like you can jump from one carrier to another and they've got the sale of the day going on down the street."
Insurers are expanding the area they consider at risk for large tornado and hail losses beyond Texas, Oklahoma and Kansas, said Howard Botts, executive vice president at CoreLogic Inc.'s spatial solutions business, who creates natural hazard databases for the industry. The U.S. Gulf Coast, Minnesota and Wisconsin are among areas now considered at higher risk, he said.
"It often takes catastrophic events, or large loss events, to get the attention of senior management," Botts said in a phone interview. Insurers are "much more sensitive to losses now that they can't offset that with their investments."