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BOSTON, MA – November 15, 2024 – A new perspective on disaster preparedness is emerging from the insurance industry, emphasizing proactive community involvement as the key to maintaining affordable and accessible coverage in an era of escalating climate risks.According to industry leaders, a collaborative approach between insurers and local governments is vital to mitigating financial fallout from increasingly frequent and severe weather events.
Kyle Godfread, Vice President of State Government Relations at the American property Casualty Insurance Association (APCIA), highlighted the importance of localized risk mitigation strategies. “The ability to understand and respond to local risks is what makes our system work,” Godfread stated, emphasizing that a one-size-fits-all approach to insurance is no longer viable given the diverse vulnerabilities across the United States.
This shift in thinking comes as insurers grapple with record-breaking losses from events like Hurricane Idalia in florida and the devastating wildfires in Maui, Hawaii, which caused an estimated $5.5 billion in damages according to the Hawaii Emergency Management Agency. These events have strained the capacity of both state-backed and private insurance markets, leading to premium increases and, in certain specific cases, non-renewal of policies in high-risk areas.
Godfread explained that insurers are willing to partner with communities that demonstrate a commitment to reducing their risk exposure. Examples of proactive steps include strengthening building codes to withstand extreme weather, investing in infrastructure improvements like flood defenses and wildfire mitigation measures, and implementing extensive land-use planning that discourages development in vulnerable areas. Florida’s My Safe Florida Home Programme, offering free home inspections and matching grants for mitigation upgrades, serves as a model for such initiatives.
The APCIA represents over 600 insurance companies providing property, casualty, and personal lines insurance to over 180 million families. Their advocacy focuses on creating a stable and competitive insurance market, and increasingly, that includes promoting resilience at the local level.
Ultimately, Godfread believes resilience is a shared obligation. “Consumers are more in tune with their risk now than ever,” he said.”If communities take proactive steps, the insurance industry will be there. But we can’t wait for catastrophe to force our hand.” He noted that delaying action will only lead to higher costs for everyone in the long run, potentially making insurance unaffordable or unavailable for those who need it most.
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