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A report from Marsh U.S. Consumer suggests that the current global economic downturn and a wide range of recent catastrophic events have created confusion and volatility in the U.S. home insurance market.
According to a report on the home insurance market recently released by leading insurance program broker and administrator Marsh U.S. Consumer, the combination of the global economic downturn and a series of catastrophic events in 2008 have led to the potential for "hardening" of the U.S. homeowners insurance market for 2009 and beyond. At the same time, Marsh suggests that market conditions are extremely volatile and that insurance pricing, terms and conditions could be impacted by a number of factors in the next few years.
A high level of insured catastrophic losses occurred in the first nine months of 2008 that led to $19.9 billion of net underwriting losses. Major events included tornados and flooding in the Midwest, hurricanes in the South Atlantic and wildfires in California. Because of these losses, finding cheap home insurance might become more difficult in the next few years as home insurance providers need to find ways to make up for their losses. While some people who renew their policies might see their rates flatten or even see slight decreases, other people might see their policy rates increase even if they have not filed claims and have paid their premiums on time.
The major difference is whether or not an insurance company has had major recent exposure to catastrophic losses. Companies that have will see the need to increase the premiums on their policies in order to make up for the revenue lost by paying out underwriting costs associated with significant disasters. However, companies that have not have serious exposure to catastrophic losses will be able to counter rising premiums charged by other insurers by keeping their premiums flat or even lowering costs. This can currently be seen by the wide range of home insurance quotes seen on the market.
With the current market volatility, it's important for people to explore their options when looking at home insurance. Even if you are currently covered, it's probably a good idea to get a free home insurance quote from a leading source such as HomeInsuranceQuotes.us to see what policies and rates are available to you. After all, you'll never know if a better deal is out there unless you do the research.
Lou Albini is a freelance writer specializing in financial services and insurance. His work has been published in major print and online news sites. He lives in Brooklyn, NY.
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