What is the state of the current insurance marketplace?
 
The current insurance market is in a state of flux with many home, auto, and commercial lines policy holders experiencing hefty rate increases. This is currently happening with all insurance carriers, throughout many states. The information following is intended to inform and explain what is happening in the current market, what is causing it, and what you can do to make it through this market.  It doesn't matter what insurance company you are with as this is an industry issue.
 
The insurance marketplace is tightening up and it's happening fast, especially for personal homeowners and personal and commercial auto. It is happening in other commercial lines as well but not as extreme. The cause is due to underwriting losses which to put it simply, means for every dollar collected in premium they are paying out more than a dollar in claims.  As a result, they are seeking rate increases from their Departments of Insurance in their states.  Until those are approved, many carriers are putting a pause on writing new policies.  This results in decreased market availability and more limited choices for the consumer. In addition, the carriers that are still writing have tightened their underwriting standards, making it more difficult to qualify for a new policy.
 
It is happening throughout the U.S., however California, Florida, Louisiana and Texas are being hit especially hard. Carriers are putting a full hard stop on issuing any new policies across the country, and carriers that have not put a moratorium on writing new policies are exiting the market or they are selling to other carriers/merging.  Every day we are hearing about a pause on new business, or a carrier putting a full stop on writing new policies. This is happening so that they don’t take on any further risk until they are able to get a rate increase approved with their respective Dept of Insurance. 
 
Some carriers require full premium payment up front for new business or requiring a 20 to 30 day hold on new applications. Some carriers will NOT reinstate coverage if it lapses, no matter the reason.  The market is disrupted, and it will affect everyone at some point.  We have seen premiums double and triple what they were the year before.  Normally we could shop other carriers but the alternative carriers are either not writing new policies or their rates have increased as well. 
 
What is causing this?
 
There are many factors impacting the insurance market. For property insurance (homeowners, dwelling fire, commercial property), it is predominantly the effect of an increase in the number of natural disasters, with hurricanes, windstorms, fires and flooding causing catastrophic property loss. This increase is in not only the number of disasters, but also the areas impacted – no longer just devastating coastal regions.
 
For commercial auto, it is the result of long-term underperformance due to more distracted drivers, a surge in the cost per auto claim due to expensive repair parts for vehicles and a rise in large jury awards and settlements.

If you have an auto or home insurance policy, your rates have gone up, and if they haven’t, they will.  This isn’t aimed personally at the individual or their claims history, rather it’s the cost of doing business. If you have not gotten a rate increase, be prepared for one at an upcoming renewal.  In some cases, carriers are choosing to non-renew policies.
 
Detailed reasons:

• The cost to rebuild homes is up dramatically due to the rising cost of materials and labor. Supply chain for materials continues to be an issue. Carriers aren’t able to absorb these increased costs without increasing premiums.
• The cost to repair vehicles is up dramatically due to the rising cost of auto parts and labor to fix them. In addition, parts in vehicles now include some technological features. Replacing a side mirror or windshield used to be $500 - now it’s more than triple that. 
• The cost of medical care continues to skyrocket. Bodily injury on auto accidents is off the charts. 
• Litigation is expensive and settlements are rising at an unprecedented rate.
• Both the frequency and severity of auto accidents have increased post COVID along with the rising frequency of auto fatalities.
• Reinsurance (the insurance your insurance carrier buys to help cushion catastrophic losses) is at or approaching capacity in many markets, and rising rates are unsustainable.  This is a significant issue affecting the property & casualty industry, and pricing correction is anticipated at least through 2024. It won’t be for forever, but it is here now.

 
There are some things you can do to help get through this current insurance market:

• Consider Higher Deductibles. This will help save some money on your policy.
• Discount Reviews on personal policies- make sure you're getting everything you're entitled to. Every carrier has different discount opportunities. Make sure you go over those with your agent.
• DO NOT let your policy cancel or lapse for any reason. Carriers are not reinstating coverage as easily as they once did. If it does cancel, they may require premium in full before reinstating. This is across the board for every line of coverage.
• Bundle your Auto and Home for more discounts and more stable pricing. Bundled/Packaged policies can sometimes save between 10-15% on each policy.  This isn’t always the case but it is worth the conversation.
• Consider tenure - jumping companies too often will hurt you in the long run. In addition, some carriers won’t take you as a new client if you have less than two years with a prior carrier. And more importantly, carriers are getting off of some risks if a claim happens in the new business term or for the number of claims in a 3–5-year window. Tenure matters with a carrier.
•  Drive carefully to avoid tickets. Tickets and accidents have a dramatic effect on rates.  If you receive one ticket, be sure to opt for traffic school so that it can be erased from your record.
• Absorb small claims when you're able and save your coverage for catastrophic losses. Talk with your agent and let them claims counsel you should a loss happen.  Frequency of claims matters quite a bit as well.

 
Finally, please remember that we are agents for the carriers, or in many cases brokers representing only you. We don’t make the rules, we don’t have control over the rates and we don’t make the decision if your policy is cancelled by the carriers. We are here to help educate, make sure you have the best insurance for your situation, manage your account with the carrier, and claims counsel with your agent when needed. We are doing our best to manage carrier changes with client needs.
 
Hopefully this helps explain what is currently occurring in the insurance market. Please be nice to your insurance agent or broker.  They are also experiencing the same increases, navigating carrier changes and doing their best to help you through this.

Welcome to our new insurance agency blog!
 
This is our very first post. We're not quite sure what we're going to write about here, but the plan is to create helpful content for customers and prospective clients about information that is relevant to you.
 
We hope you'll come to view this as a top resource for keeping your family and your finances safe.
 
Here are a few of the topics we may be writing about:

• Answers to clients' frequently asked questions.
  
• Helpful information about insurance shopping.
• Safety and Health Tips and Ideas.
• Local Community Information.

 
Stay Tuned!