Follow on Google News
News By Tag
News By Location
Follow on Google News
Rising Prices and Coverage Denials - Insurance Industry Update
By: J G Petit Insurance Agency
Carriers are pulling a full hard stop on issuing any new policies across the country, and carriers that have not put a moratorium on binding new coverage, are just leaving the market or they are selling to other carriers/merging. They simply can't operate profitably in this inflationary market. Every day we are hearing about a pause on new business, or a carrier putting a full stop on writing new policies. Some carriers are requiring full premium payment up front for new business or requiring a 20 to 30 day hold on new applications.
Carriers are shifting underwriting guidelines, indicating they only want preferred business, no claims within 5 years, must include home and auto bundles, etc.
Some carriers will not reinstate coverage if it lapses, no matter the reason.
The market is disrupted and it will affect you. If it hasn't yet, it will. I have personally seen premiums double and triple what they were the year before.
The cost of claims has risen exponentially in the past 2 years, thus resulting in the carriers having to raise premiums or pull out of some markets. In some states, carriers have applied for rate increases, but have not been able to get them approved, so they simply shut down for new business.
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 simply can't survive paying these higher prices without charging more themselves.
The cost to repair a car is up dramatically due to the rising cost of auto parts and labor to fix repair a car. In addition, parts in vehicles now include some technology 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.
Reinsurance 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.