A common question in our industry is: why did my insurance rates increase if nothing changed? If you’ve opened your renewal notice lately and felt shocked by a rate hike, you’re not alone. Many policyholders are seeing increases even when they haven’t filed a claim or changed coverage.
What is a hard market in insurance?
Right now, the insurance industry is in what’s called a hard market. That means coverage is harder to find, premiums are higher, and insurance companies are being more selective about which risks they take on.
After several years of rising claims, storm damage, and higher repair costs, many insurers are tightening their guidelines and adjusting prices to keep up. A hard market simply happens when there’s more demand for insurance than there is availability.
It’s a normal part of the insurance cycle, but it can be frustrating for homeowners and business owners. Having a trusted local agent can help you navigate these changes and find solutions that fit your needs.
What is causing the hard market in insurance?
Several factors are driving the current hard market in the insurance industry. Many of them come down to higher costs and increased risk across the board.
- More severe weather events: Natural disasters and major storms have led to more claims, especially for property and commercial insurance.
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Rising repair and replacement costs: Inflation and supply chain issues continue to push up the cost of materials, labor, and repairs.
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Limited availability of insurance products: Some carriers have reduced coverage options or pulled out of certain markets to manage risk.
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Economic conditions: Interest rates, inflation, and overall economic uncertainty also impact how insurers price their policies.
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Higher reinsurance costs: Reinsurance, which is coverage that protects insurance companies themselves, has become more expensive, and those costs are passed down to policyholders. Learn more about how reinsurance impacts your premium here.
All of these factors contribute to higher insurance rates and tighter underwriting guidelines. Partnering with an experienced agent can help you understand your options and find ways to manage costs during a hard market.
Contact Troxell today to discuss your insurance.
This blog was written by:
Ryan Augustine, CRM, CIC, CLCS, CAWC
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RYAN AUGUSTINE IS AN ACCOUNT EXECUTIVE AT TROXELL. HE WORKS BOTH ON PERSONAL LINES AND COMMERCIAL LINES TO HELP NEW AND EXISTING CLIENTS. RYAN WORKS HARD TO KEEP HIS CLIENTS EDUCATED ON TRENDS, COVERAGE, AND CHANGES IN THE INSURANCE INDUSTRY.