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The insurance industry is facing rising costs as claims for fire and flood damage have been on the rise. More frequent floods, storms, and wildfires are affecting homeowners across North America. As the risks and costs rise, premiums are up - and insurance companies are forced to find unique ways to control their costs.

There are increasing concerns that insurance companies are fighting valid claims after natural disasters to keep their costs down. It seems that every time a natural disaster occurs now, insurers fight tooth-and-nail to reduce the amounts they pay out. 

Can You Fight the Insurance Company?

If you find yourself in a position where the insurance company is trying everything it can to reduce your claim, you may want the help of an insurance lawyer. But what is an insurance lawyer, and what can they do for you?

An insurance lawyer helps you negotiate with an insurance adjuster. With their knowledge of insurance claims and contract law, they can help you understand what you're entitled to under your insurance policy and make sure that the insurer pays what they agreed to in your contract.

The insurance adjuster you work with on your claim may be a third-party, but they are ultimately paid by the insurance company. They may be pressured by the insurer to deliver an assessment more favorable to the company or else lose out on future work.

As natural disaster costs increase, insurance companies are only going to fight the climbing costs harder. The industry's response to COVID-19 business interruption claims could be a telling sign. As widespread claims become more common, it may become tougher to negotiate with insurers.  

Flood Risks Are on the Rise

In some places, flood claims are six times higher than what they were only three years ago. While increased populations in vulnerable flood zones are one answer for the rise in claims, many believe that more severe storms and weather related to climate change are also behind the higher rates of residential loss.

Parts of the world that were previously at low risk for floods have increasingly seen high water levels. From river valleys to coastal regions, overland flooding is on the rise, according to insurance industry data.

The insurance industry is responding to those risks by making flood insurance more widely available in regions where previously it was rarely, if ever offered.

Wildfire Regions Are Expanding

In addition to flood risks, rising temperatures and drier conditions throughout North America are resulting in wildfires that are more frequent and harder to put out. As urban sprawl creeps into wildfire zones, that means millions more homeowners are at risk for extremely costly wildfires.

As the area affected by wildfires expands, damages increase as well. In 2000, wildfires caused $1 billion in damages in the Western United States, while in 2019, that figure had risen to $4.5 billion, that after a record-breaking two years in 2017 and 2018 that cost over $40 billion.

Not only are super-events becoming more common, even regular years are consistently more expensive.

How the insurance industry responds to these challenges will be important to keep an eye on. It may come down to homeowners needing more help to make sure that they don't lose out.