CEO Of Farmers Union Insurance States Insurance Premiums Will Go Up In Next Year Due to Wildfires

FARGO, N.D. (KVRR) — On Friday, U.S. insurance stocks were dropping and analysts are estimating the cost of the wildfires could top $20 billion, making it the costliest disaster in California history.

“There are more severe events happening in our world and some say they are becoming more frequent, but certainly the severity of the events is and has been happening. And what compounds that is the effect of inflation on that,” said Mark Anderson, CEO of Farmers Union Insurance.

Several insurance companies, like State Farm and Nationwide, have either left or reduced coverage in the state due to the rising costs of disasters. But with the rising costs, Anderson says that insurance premiums nationwide will be affected.

“The impact of an event that’s not in our area right then it does have an impact on insurers everywhere in the United States and really everywhere in the world. The things that happen in Europe and the things that happen in Asia and all those large large events do have an impact on the homeowner in North Dakota,” said Anderson.

From 2020 to 2023, average home insurance costs rose 13 percent, but areas with the highest disaster risk had a larger increase.

“Those insurers that have those policies that cover that loss they get reimbursed at some extent by reinsurers. And the more that happens the less the capacity for that, those events happen right. The more they pay out the less, and we can say, the less profitable or unprofitable those companies are,” said Anderson.

Anderson says Farmers Union Insurance won’t have any effect on customers this year, but if there were to be any more disasters in our area, that could change.

As of Thursday, Insurance Commissioner Ricardo Lara issued a notice calling on all insurance companies to stop any pending non-renewals or cancellations for any properties located near wildfires.