THURSDAY, AUGUST 3, 2023
The Insurance marketplace is tightening up and it's happening fast especially for auto and home insurance companies. Insurance companies are enforcing a hard stop on issuing any new policies across the country. Insurance companies are leaving the market, selling to other carriers or merging. They simply can't operate profitably in this inflationary market. It's getting downright ugly out there. This market is disrupted, and it WILL affect you.
The cost of claims has risen exponentially in the past 2 years. Thus, resulting in the carriers having to raise premiums and pull out of some markets. If you have an auto or home insurance policy, your rates have gone up. This isn’t personal, and it’s not based on a claim you may or may not have had; it’s simply the cost of doing business.
➡️ The cost to rebuild your home has increased dramatically due to the rising cost of materials and labor. The supply chain for obtaining materials continues to be an issue. We can all agree that everything has gone up in price. Carriers simply can’t survive paying these higher prices without charging more themselves.
➡️ Reinsurance (the insurance your insurance carrier buys to help cushion catastrophic loss) is at or approaching capacity in many markets and rising rates are unsustainable.
➡️ The cost to repair your car is up dramatically due to the rising cost of auto parts and labor to fix your car. In addition, parts in vehicles now include additional technology features. For example, replacing a side mirror used to be $150 - now it’s more than triple that cost.
➡️ The cost of medical care continues to skyrocket. Bodily injury regarding 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 are WAY up post COVID, along with the rising frequency of auto fatalities.
This is a significant issue affecting the property & casualty industry (home and auto), and pricing correction is anticipated at least through 2024. This is a nice way to say - you will see rate increases more frequently.
• Insurance Companies are tightening up tremendously on roofs. Whether you are changing to a new insurance company, or you have been with a carrier for years, carriers are now inspecting roofs more than ever to make sure there is no current damage.
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.
✅️ Safe Driving Telematic Programs -Telematics can reward you by giving you a discount for good driving.
✅️ Discount Reviews - Make sure you're getting everything you're entitled to. Every insurance company has different discount opportunities. Make sure you go over those with your agent.
✅️ Bundle your Auto and Home for more discounts and stable pricing. Bundled/Packaged policies almost always include better coverage and benefits and the cost savings is usually 20% on each policy.
✅️ Consider tenure - jumping companies too often will hurt you in the long run. In addition, some insurance companies won’t take you as a new client if you have less than two years with a carrier. Even more importantly, insurance companies are getting off some risks if a claim happens in the new business term or for the number of claims in a 3 to 5 year window. Tenure matters with a insurance company.
✅️ Follow the laws so you don’t get any tickets. Those tickets really increase the rates on your policy and stay on your record 3-5 years, depending on the insurance company.
✅️ Absorb small claims when you're able. Talk with your agent and let them counsel you on a claim should a loss happen. Stop using your towing or roadside assistance as a maintenance policy. Frequency of claims matters; it REALLY matters.
✅️ Buy your insurance from an experienced Independent Insurance Broker that has options and can help you navigate this crazy market WITHOUT SACRIFICING COVERAGE. Lowering coverage could ultimately cost you more money in a loss. Texas State minimum limits are $25,000 in property damage which won’t cover half the cost of cars on the roads these days. Once your limits run out, you are responsible for anything above that.
And please remember that we are agents not the insurance companies. My team is here for you, but please know 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 at the best rate available, manage your account with the carrier, claims counsel when needed and advocate for you.
As always, we are happy to help, and I hope this message explains a little bit of what is going on in the insurance marketplace as we are in unprecedented times. And please be nice to your insurance agent - she or he is taking the same increases, navigating carrier changes, and doing their best to help you through all of this.
Posted 11:27 AM
Tags: insurance, marketplace, high rates, increases, increase in premiums, high cost of insurance, karen ehlers insurance, auto, home, auto insurance, home insurance