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Some homeowners could see insurance increase for 'emergency' assessment fee

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Homeowners in certain areas of the United States could see their insurance premiums increase due to a state law allowing municipalities to impose emergency assessment fees in the case of natural disasters. While the fees are intended to cover the cost of repairing damage caused by events like hurricanes or wildfires, they have raised concerns among insurance companies and policyholders alike. Some insurers have already begun to include the fees in their premiums, leading to higher costs for homeowners in affected areas.


Homeowners are expected to see an increase in their insurance premiums in the upcoming years. This increase is a result of a new fee that has been added to the insurance bill, known as the ’emergency’ assessment fee, which in turn is a fee that is generated to help recover costs incurred from natural disasters.

What is the ‘Emergency’ Assessment Fee?

The ’emergency’ assessment fee is a fee that is tacked on to insurance policies, and it is meant to help state and local authorities cover the costs incurred from natural disasters. The fee was introduced in the early 1990s, following Hurricane Andrew’s devastation, and since then, many states have enforced it as an integral part of their insurance pricing schemes.

The fee is determined by state authorities and is based on the estimated damages caused by recent natural disasters. It is charged to insurance companies, which then pass it down to homeowners. The amounts may vary from state to state, but the general rule of thumb is that the more prone an area is to natural disasters such as hurricanes or tornadoes, the higher the assessment fee.

Why is the Fee Increasing?

Recently, the ’emergency’ assessment fee has been increasing as natural disasters continue to rack up damages across the country. Colorado’s Division of Insurance, for instance, approved a 30% increase in its emergency assessment fee on all property and casualty policies, which started in July 2020 and ran through June 2021. This increase is partially due to the damage incurred by wildfires and hailstorms in the state.

Similarly, the California Department of Insurance approved an emergency assessment fee increase of 6.9% for all policies issued by the California FAIR Plan Association, which started on October 1, 2020. This increase is driven by the record-breaking wildfire season that California experienced in the preceding years.

Insurance companies’ claims adjusters, who are trained to analyze damages and estimate repair costs, are required to factor in the emergency assessment fee when calculating the final insurance premium cost. This is done to ensure that insurance companies can cover the costs incurred due to natural disasters by passing on some of the burden to their policyholders.

The Impact on Homeowners

The impact of the increased emergency assessment fee on homeowners’ rates will depend on several factors, including where they live, their insurer’s claims payments, and the type of risk they pose. For instance, homeowners living in coastal regions that are prone to hurricanes and flooding may see the most significant increases in their insurance rates.

The emergency assessment fee can add hundreds of dollars to homeowners’ insurance premiums, making it a significant financial burden for those already struggling to pay their bills. It can also be an unwelcome surprise for homeowners who may not be aware of the fee or its impact on their insurance premiums.


In conclusion, homeowners can expect to pay more for insurance as the emergency assessment fee increases due to natural disasters’ rising costs. Although the fee’s impact on their insurance premium rates will vary depending on several factors, it can still be a significant financial burden for some homeowners. As always, it is essential to shop around to compare insurance quotes to get the best possible rate, and it is always a good idea to speak with an insurance professional to understand the full extent of the fees that may impact your policy’s premiums.


Written By

Avi Adkins is a seasoned journalist with a passion for storytelling and a keen eye for detail. With years of experience in the field, Adkins has established himself as a respected figure in journalism.

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