08/22/2023
🔴 Important Insurance Update! 🔴
There is a shift happening in the insurance industry, and it's impacting us all.
We don't talk a lot about the current landscape, but there are moments when the information we share becomes crucial for us all. We're here to provide insights into the rapidly changing insurance landscape and shed light on what's shaping our industry.
Specifically in California, the home & auto insurance market is seeing rapid changes. Some insurance companies are taking significant steps, like stopping new policy issuance altogether. Others are exiting the market or merging. We're hearing about new business pauses or stops often, and some carriers are asking for full premium payments upfront or delaying applications. Underwriting guidelines are also changing, favoring profiles like those with no claims in 5 years and bundled home & auto policies. Some carriers won't reinstate coverage after a lapse, regardless of the reason.
This disruption will impact us all; some have already seen premiums double or triple from the previous year.
The cost of claims has surged, leading carriers to raise premiums or exit markets. If you have home or auto insurance, rates have likely increased or will soon. This reflects the industry's current cost structure.
➡️ Rebuilding a home costs more due to higher materials, labor, and supply chain challenges.
➡️ Car repairs are pricier due to increased auto parts costs, labor, and new technology features.
➡️ Medical care costs are rising, leading to higher bodily injury claims.
➡️ Litigation expenses are soaring, resulting in larger settlements.
➡️ Auto accidents' frequency and severity have risen, as have auto fatalities.
➡️ Reinsurance, which protects against large losses, is reaching capacity in many markets, leading to unsustainable rate increases.
The issues only affect the property & casualty industry, and we expect pricing changes to continue until at least 2024. It won't last forever, but it is the current reality.
To navigate this market, consider:
✅ Opt for higher deductibles to save on policy costs.
✅ Explore safe driving telematic programs for discounts.
✅ Avoid policy cancellations or lapses; reinstating coverage is complex.
✅ Bundle auto and home insurance for discounts and stability.
✅ Consider tenure with an insurance carrier for stability.
✅ Follow traffic laws to prevent tickets and rate increases.
✅ Reserve coverage for major losses; absorb smaller claims.
Lastly, please remember that as agents, we're not in control of industry trends, rates, or carrier decisions. Our desire is to educate, find the best solutions, manage accounts, and offer claims advice. We're striving to balance the changes with your needs.
We hope this sheds light on the insurance landscape. Please support our insurance agents, as they're navigating the same challenges while striving to assist you.
A big thanks to the insightful agents who contributed to this shared message.
