Surviving the Storm: Navigating the Challenges of the 2024 Hard Insurance Market
This 2024 year is starting out strong and challenging for most of us, especially when it comes to our insurance bills. Welcome to the 2024 Insurance Market! This phenomenon is poised to reshape the industry, potentially posing challenges to both insurance providers and policyholders alike. Join us as we dissect the driving factors behind this shift, unravel its implications, and offer insights into how customers can navigate this transforming landscape. Get ready to delve into the complexities of the 2024 hard insurance market and discover strategies to thrive amidst its challenges.
What is a Hard Insurance Market & Why Are We Here?
A hard insurance market is a period when insurance markets experience an increase in rates, reduced availability of coverage, and stricter underwriting guidelines. While there is a handful of reasons, these are the most effective:
A large Increase in Catastrophic Events: Hurricanes, earthquakes, wildfires, etc.
Inadequate Underwriting: There has been a large disparity between what customers said they had vs. what they actually needed, and the insurance companies had to pay for that lesson.
Low Interest Rates: This meant it’s been harder for insurance companies to be profitable and overall be able to offer lower rates.
Regulation Changes: With stricter local and national regulations for insurance companies, the companies have to focus on increasing rates and run tighter ships. Check here, for additional regulation changes!
What a Hard Insurance Market Is Going to Look Like:
Rising insurance premiums: Companies may witness significant increases in their insurance premiums. This can be particularly challenging for small businesses or individuals who rely on insurance coverage for protection. Customers can expect a 15%-35% on their auto and home insurance bills.
Reduced coverage options: As insurance carriers become more cautious, they may limit the types of coverage available or exclude certain high-risk activities altogether. This reduction in coverage options can leave businesses or individuals exposed to greater risks.
Stricter underwriting guidelines: Insurance companies may become more selective in who they choose to insure. This means they could impose stricter underwriting guidelines, such as higher deductibles, more detailed risk assessments, or requiring additional safety measures. This is making it harder for some individuals or businesses to obtain coverage.
Financial strain on businesses: Higher insurance costs can put financial strain on businesses, especially those operating in industries with inherently high risks. This can lead to reduced profitability, limited growth opportunities, or even bankruptcy for some organizations.
Impact on economy: A hard insurance market can have broader implications for the economy as well. Businesses may spend more on insurance, leaving less capital available for investment or hiring. Additionally, limited coverage options or unaffordable premiums might slow economic growth.
How To Survive & Even Thrive
Here are a few key things to keep in mind to beat the odds ride out this hard insurance market:
Be prepared for increased rates. Shopping insurance companies purely on the lowest price is like betting on a tetherball tournament, too much back and forth and wasted time. Connect with your insurance agent to shop and receive a recommendation when you get a larger than expected increase. Note that shopping your insurance is taking 3-5 longer than it used to, so please be patient.
Be prepared for your home insurance to need additional documentation, current pictures and even an inspection.
Do not let your policy lapse! This could impact your ability to get accepted for future insurance and possibly double the last rate you were given.
Use claims only as necessary. Sometimes we have really bad days, and we need to file a claim, that’s okay! But if you’re filing an insurance claim, just to save a few hundred dollars, it’s going to cost you significantly more in the long run. Reach out to your agent and insurance team for specific claims counseling and what their recommendations are.
Review discounts and possible savings with your agent. These can include:
While the future of insurance is predicted to be more costly and dynamic than before, being educated and proactive is your best action in this hard market.
If you’re looking for a fresh and engaging insurance experience, visit the group at Northtown Insurance for all your insurance questions and needs!
Fine Print: This is a general overview with the intention of bringing awareness to coverage options and general industry standards. Coverage varies between carriers and states. Check your policy for specifics.