Friday, August 31, 2007

Storms strike insurance rates

Insurance Newsnet: Scientists haven't reached a consensus about whether global warming makes hurricanes more frequent and fierce, but that hasn't stopped the insurance industry from raising its defenses -- and its rates. Many coastal property owners in North Carolina have seen their insurance rates increase 25 percent since May. Rates are rising amid fears that North Carolina could be hit by a storm as destructive as Hurricane Katrina, which ravaged the Gulf Coast in 2005, or as powerful as Hurricane Dean, which struck Mexico last week.

"I know everybody on the coast is suffering from high insurance rates," said William Baggett, an owner of the oceanfront Blockade Runner hotel in Wrightsville Beach. He said his rates have quadrupled since 2005. "I don't think they are quite justified."

Officials with the N.C. Rate Bureau, which prepares rate requests for insurance companies, don't specifically blame global warming for more hurricanes. But the insurance rate increase was based on historical records of hurricane strikes, plus scientific data showing increased ocean temperatures in recent years. Some scientists think the warmer waters are fueling more intense hurricanes.

Insurance risk models used to predict hurricane damage and rate requests indicate that the Atlantic Ocean has warmed up to seven-tenths of a degree Fahrenheit since 1995. "We believe we're in a period where global climate factors favor hurricane development," said Ray Evans, general manager for the N.C. Rate Bureau, which had sought a 100 percent increase in coastal property premiums, rather than the 25 percent jump…

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