Navigating Personal Insurance in a Shifting Marketplace
Changes in the Insurance Market
The insurance industry is going through large changes, causing waves throughout the marketplace. We especially see the squeeze happening in home and auto insurance. Insurance companies are hesitating to issue new policies, and some are exiting the market or joining forces due to the challenges of making a profit in an inflationary environment.
Shifting Underwriting Guidelines
Carriers are hitting pause on new business every day, some asking for full premium payment upfront, while others are placing a 20 to 30-day hold on new applications. The underwriting rules are shifting to prioritize preferred business, considering factors like having no claims in the last 5 years and promoting bundled home and auto coverage.
Navigate and Optimize Your Coverage
There are proactive steps individual policyholders can take to navigate their personal insurance, including:
- Tenure: Maintaining a longer tenure with a carrier can prove beneficial, as some carriers may require a minimum period for new clients.
- Policy Management: NEVER let a policy lapse, as reinstatement is becoming more challenging. Bundle auto and home insurance for added discounts and stability.
- Claims Management: Absorb small claims when possible and save coverage for catastrophic losses. Frequent claims can significantly impact premiums.
- Law Adherence: Follow traffic laws to avoid tickets that can impact policy rates.
- Consider Higher Deductibles: Opting for higher deductibles can provide some relief on policy costs.
- Telematic Programs: Safe driving can be rewarded through telematics programs, offering discounts for good driving behavior.
- Discount Reviews: Regularly review your policy for available discounts, as different carriers offer various opportunities.
Challenges Faced by Personal Insurance Carriers
In the past two years, a rise in claim expenses has greatly affected personal insurance. As a result, insurance providers are struggling to decide whether to raise premiums or exit certain markets. In states where they can’t easily adjust rates, some carriers are choosing to stop taking on new customers. This has led to a significant jump in premiums for individual policyholders, doubling or even tripling in some cases.
Some of the drivers of premium increases in personal insurance include:
- Home Reconstruction Costs
- Auto Repair Expenses
- Medical Costs and Litigation
- Auto Accidents and Reinsurance Challenges
Reach out to an Advisor Today
Reach out to a trusted RCM&D advisor today to tailor your coverage and policy to align seamlessly with your personal risk management strategy.