Chris Clark's saw his new home insurance policy increase about 30% from last year's
Spring storms left thousands of homes in East Tennessee in need of repair. As a result, many homeowners are now seeing an increase in home insurance rates.
Chris Clark has lived in his North Knoxville home since the mid-1990's, which he insures with Shelter Insurance. He said he has paid about the same rate since he first moved, which usually totals about $700 per year. When he renewed his policy this September, the final total increased to about $1100.
"My reaction was to contact my agent and find out if this had relationship with the weather -- the storms that we had in June of this year."
Clark's home did sustain storm damage, but he said his insurance told him the rates were not individually based.
Bob Nelson owns another Knoxville insurance agency and said disasters like the storms of 2011 are categorized as "Catastrophic Losses."
"'Cat losses' [are] when we have catastrophic losses such as earthquakes and tornadoes and high winds and hail damage. Which we have in this area experienced wind and hail," Nelson said.
He reminds customers it is normal to see companies raise their annual rates. However, he said the storms will contribute to a higher increase than usual this year.
"Insurance companies are for profit, but they're recouping their losses right now and over the next few years, they'll probably shoot way up. Then you'll see them come back down," he said.
Nelson said each company sets its own rates, which are extended to all customers equally. He expects many local homeowners to see a rate increase even if they didn't file a claim.
Insurance companies are regulated by the Tennessee Department of Insurance if they drastically alter rates. A spokeswoman from the department said if a company wishes to increase or decrease average state rates more than 15 percent, the department must grant approval first.
Clark said he has a great relationship with his agent, and plans to stay with Shelter. However, the rate increase is a tough burden this time of year.
"I'm the only income for the family. So one income, the more expenses, obviously, overhead - that does make it harder on a family of four."