Norwood – As harrowing images of homes burning to the ground arrive from California on a daily basis, Massachusetts homeowners are understandably concerned about their preparedness and insurance coverage if a disaster strikes our coast.
“There’s a ripple effect”
“Whenever you see catastrophic losses like they’re seeing in California right now, there’s going to be ramifications, repercussions across the country, if not across the world,” explained Patrick Dempsey, a Norwood-based insurance agent and former chair of the Massachusetts Association of Insurance Agents.
“That could mean higher rates for people across the country, even if it isn’t happening in our own backyard. It’s happening in a market that will affect ours. “There’s definitely a ripple effect,” he said.
Dempsey explained that insurance companies are not equipped to cover sudden losses of hundreds of billions of dollars, so in situations like those we’re seeing in California, they turn to their own insurance companies in the “reinsurance” industry.
For the time being, Massachusetts does not appear to be at risk of fires like the West Coast as weather conditions worsen around the world. “[Fires] haven’t been an issue here, though we did have some this year in the Milton Blue Hills area. “There were legitimate forest fire concerns,” he explained.
According to Dempsey, one significant challenge in California right now is that the state “has been noted to go through some struggles in the recent past with certain larger carriers kind of pulling back on a large scale.”
Massachusetts safety net
Because insurance is governed at the state level, Dempsey believes Massachusetts residents should be reassured by their state’s safety net.
“I believe it is a feather in Massachusetts’ cap that the Insurance Commissioner’s office and the companies work well together in the sense that they are not charging excessively high rates, but they are keeping the companies in a position to collect enough premiums to pay out claims.
“It’s a delicate balance,” he explained. “Other states might be jealous of how well it’s being done right now, and I’m proud that that’s going so well in our state, so hopefully good things in the future.”
Given that Dempsey is a local agent, his advice to Massachusetts homeowners is unlikely to surprise them. He recommends staying local and working with an agent to find the right home insurance policy for you.
“When you deal with an agent, they can really take you through these steps, and they also know their backyard,” he told me. “You know, if I’m writing a policy in Norwood, I’ll know when certain homes are going to be near, say, a brook or a stream that might put it in a flood zone.”
