As sub-zero temperatures settled in over NH at the beginning of the year, it was easy to feel far away from the devastating fires sweeping through Los Angeles and the surrounding communities. And yet the historic insurance costs associated with those fires—estimated in late January to exceed $250 billion, according to AccuWeather—will be felt around the country, including by NH businesses.
The historic fires are yet another climate crisis that’s having a real impact on the insurance marketplace in NH and the rest of the country, leading to increased premiums and fewer insurers willing to issue policies, experts say.
That’s resulted in a “very hard market” where the demand for coverage is high, but access to coverage is more restricted and expensive, says D.J. Bettencourt, commissioner of the NH Insurance Department.
Now, business owners in the Granite State must be proactive in protecting themselves from climate change—both by updating their insurance policies and doing what they can to prevent weather-related damage. Not only should businesses budget for rising insurance rates, experts say, but they should also reevaluate their insurance coverage to make sure they’re adequately protected. Other steps, like protecting property and equipment from the impact of extreme weather, can also minimize a business’s financial risk.
“Owners should definitely consider where the business is located and what-if situations,” says Julie Glosner, southern regional director with the NH Small Business Development Center. “If you don’t have insurance—or the proper insurance—[a weather disaster] could close you down.”
Rising Rates
Last year, the damage from extreme weather in the U.S. totaled $182.7 billion, according to the National Centers for Environmental Information. Twenty-seven separate weather events led to damages in excess of $1 billion, data show.
Although none of those major weather events took place in the northeast, the massive cost is impacting the insurance marketplace in NH. Extreme weather events are “causing insurance companies to reevaluate their risk exposure, tighten underwriting guidelines, and [reevaluate] the type of risk and amount of risk they’re exposing themselves to,” Bettencourt says.
This is reflected nationally. In January, the U.S. Department of the Treasury released a report detailing how homeowners insurance is becoming more expensive and less readily available. Between 2018 and 2022, homeowners insurance costs rose, on average, 8.9% faster than inflation, the report found.
Commercial property insurance faces similar trends, according to the Insurance Information Institute, and premiums are expected to continue to rise this year.
Flood Insurance
New Hampshire and the entire northeast are considered lower risk for the impact of climate change. It’s rare to hear about earthquakes, wildfires, or extreme temperatures in the Granite State. Even so, damaging weather events are becoming more common, causing many business owners to rethink the amount and type of coverage they have.
“You don’t want to be that guy who says, ‘It will never happen to me,’” says Brian Jacobsen, president of Immanuel Insurance Agency in Barrington.
Recently, flash flooding has become a major issue in areas of NH and Vermont, Jacobsen says. Towns have “had a ton of flooding in areas you wouldn’t even have talked about,” he says. “I would have never thought the flooding would happen where it did.”
That’s especially devastating because most property insurance policies don’t cover flood damage. Catastrophic flooding in Cheshire and Sullivan counties during July 2023 left homes and businesses with little recourse, and many people didn’t realize their policy didn’t include flood insurance.
“Those were some of the most difficult calls that I have ever received in 20 years of public service,” Bettencourt says.
Those floods were the impetus for the insurance department starting The Weather Catastrophe Response Team, which launched in 2024. The team responds on the ground to extreme weather events, helping people consider “how they can leverage their insurance policies to get their lives back on track,” Bettencourt says. The team serves the entire community, including businesses.
Bettencourt also recommends that all NH businesses carry flood insurance. “That’s not intuitive to a lot of people,” he says. “A lot of businesses are small businesses, and they have their attention and focus elsewhere. But you’re going to want to have flood insurance coverage.”
Evaluating Coverage
Insurance rates aren’t the only expense that increased substantially over the past few years. Due to high inflation, the replacement costs for property and equipment have also risen, leaving many people underinsured, according to Eleanor Spinazzola, president of E+S Insurance Services in Gilford.
“Everything is so expensive to repair and replace, so [many businesses] may not have enough insurance,” Spinazzola says.
A 2022 Harris poll found that only 43% of business owners had updated their insurance policies to cover rising prices, even as the cost of machinery, equipment, and materials rose. Spinazzola has been working with clients to update values and coverage as needed, and she reminds other business owners to do the same.
Another area to reconsider is your commercial umbrella policy. While a $1 million policy used to be typical, “We need to rethink that now. A million dollars isn’t a lot of money today,” Spinazzola says. “We are quoting higher limits, definitely.”
Staying Proactive
While extreme weather can seem unpredictable, business owners can take proactive steps to protect themselves from climate-related damage. “Think overall about the steps that you can take to fortify your physical structure,” Bettencourt says.
Trimming trees, maintaining your roof and foundation, and even landscaping your property can all help lessen the impact on your business when extreme weather strikes. It may also help you get a lower premium, since you can document these changes and present them to your insurance underwriter.
“Taking steps to mitigate the potential risks that would come with a weather event is not only going to ensure safety, but also better position you in terms of underwriting,” Bettencourt says.
Understanding Your Risk Tolerance
Each business will have a different risk-tolerance level when it comes to climate change and weather catastrophes. “With insurance, you have to ask yourself how much are you willing to risk,” says Jacobsen.
If you choose not to take out additional coverage—like a flood policy—consider how you would respond to damage or storm-related closures, Glosner says. “How are you covered otherwise?” she asks. “Do you have some money in the bank?”
With extreme weather becoming more frequent, planning for climate change and the impact of weather is part of having a resilient business that can stand the test of time. “Try to understand what potential risk your business might have,” Glosner says, “and how you might be able to recover from the different events.”
