Extreme weather raises insurance costs in Latvia
Climate change-driven damage from storms, hail, and floods is increasing insurance premiums, particularly affecting home, auto, and agricultural insurance.
Over the past year, Latvia has seen a moderate increase in insurance premiums, driven by more frequent and severe extreme weather events. In home and auto insurance, damages from storms, hail, and flooding are becoming increasingly significant.
For business property insurance, insurers assess both building location and business continuity risks during extreme weather. Agriculture is particularly vulnerable, as it directly depends on weather conditions – drought, excessive rainfall, hail, storms, and frost can cause substantial crop losses.
As climate change progresses, the scale of losses from natural disasters grows, further increasing insurance costs. This raises the question of whether certain areas in Latvia may become too expensive to insure in the future, and whether agricultural land prices will rise significantly due to climate risks.
