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2023 Insurance Market Update

Our long-term clients know well that our agency works hard to ensure that our clients are not only serviced with respect, but also that we pride ourselves on each interaction with our office being positive and friendly. Our agency is always working to quote policies and ensure that insureds are getting excellent coverage for a competitive premium. If you’ve received your 2023 renewal, you may describe the premium as “less than pleasant”. This year, it is rare that our office is seeing increases on personal home and auto less than 10% at renewal. In fact, weekly, we have been experiencing multiple policies with increases over $1000 for the year. We know this is frustrating for clients and it is equally frustrating for us.

The Insurance market is tightening up and it's happening fast. In June, Nationwide Insurance (Yes, a cornerstone insurance company) announced that they are tightening their underwriting guidelines. Instead of being able to issue policies and inspect later, Nationwide is requiring that the inspections are done prior to issuance. They are asking for more documentation than ever before. And they aren’t alone. Safeco Insurance has been declining over 35% of the quotes that we put into their rating system. Ohio Mutual will not issue an auto policy if there is more than one accident or violation within the household. Several carriers are pushing the six-month auto policy so they can issue rate corrections faster to insureds. The list goes on and on. This negative outlook has left many clients asking “why”:

  • The cost of claims has drastically increased. Cars are costing more, building costs have increased exponentially over the last three years and medical costs have been on the rise for the last decade. It appears that every direction insurers turn, the costs are rising. We know you feel it too in your everyday expenses.

  • Litigation is expensive and settlements are rising at an unprecedented rate. Remember the days where a lawsuit was uncommon?

  • Both the frequency and severity of auto accidents are elevated in the past two years. Unfortunately, the number of fatality accidents has also increased substantially.

  • Reinsurance cost (the insurance your insurance carrier buys to offset catastrophic loss) is rising. Remember Hurricane Ian in Florida? Progressive alone sent $800 Million to Reinsurance-- $800 MILLON from one company for one storm event.

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

  • Consider Higher Deductibles. The higher the deductible, in general, the lower the premium.

  • Safe Driving Telematic Programs. Many carriers have an app that you can download to give you a discount based on your driving habits.

  • Review your policy! Your agent can point out potential discounts. Phone reviews are good, but in person reviews are always better!

  • Consider loyalty. There are some carriers that are no longer taking clients who have a history of “jumping” carriers. Also, after a claim is settled, carriers look at profitability for rate discounts and/or non-renewal placements.

  • Avoid those tickets. Speeding tickets and other traffic violations can drastically increase your premiums!

  • Encourage others to have safer habits. Insurance is a cost sharing model. Unfortunately, even if you have not had a claim in the last 30 years, you've stayed with the same company and you've met regularly with your agent, you've likely also experienced an increase in premium. As the costs for the insurance companies continue to rise, they have to offset the increase with their entire book. Help encourage those around you to have safer habits--- encourage others to put down the phone while driving, create a neighborhood watch to help prevent theft, if you see damage on your neighbor's home (loose shingles, loose siding, deceased trees) kindly inform your neighbor so they can take care of the problem before it is an issue.

  • Embrace technology. The world is being inundated with technology and the insurance world including risk management is no different. Here are a few things to consider adding to protect your assets:

    • Security Systems- While not a new concept, adding security cameras to your property can help deter theft, but also can be very helpful in understanding what happened in a claims scenario. Insurance companies spend a lot of money investigating a claim which can be minimized if the claim is caught on camera

    • Dash Cameras- These little cameras are becoming increasingly popular and are also lowering in price.

    • Ting- Have you heard about this little device that plugs into your electrical outlet and looks for potential electrical problems? What a way to prevent potential home fires!

    • Water Sensors-n Homeowners can now purchase water sensors to put near sump pumps or near plumbing that may have the potential to leak. We recommend buying several and putting under each sink, next to the dish washer, in the laundry, by the water heater and finally by the sump pumps!

    • Fire extinguishers- While not a new technology by any means, we have found that many clients do not have fire extinguishers on their property. We recommend having several in your home as well as any outbuilding. For our famers, be sure to get extinguishers for your semis, tractors and combines.

    • Review Billing Options- The savings on billing changes can be big or small. Many carriers now offer substantial paid in full discounts. Some carriers offer discounts to set up reoccurring billing and almost all offer a small discount to go paperless. Every dollar counts so these items are worth reviewing.

As agents, we promise to do our best to navigate these challenging waters that we are experiencing. Please visit us in our office to discuss more! We are here to help!

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