Managing Your Personal Insurance in a Hard Market

October 18, 2023 · 3 minute read · Personal Lines

Blog Managing Your Personal Insurance in a Hard Market

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The insurance industry is undergoing a significant shift referred to as a hard market, which has severely impacted personal home and auto insurance. A hard market occurs when insurance companies pay out more in claims than they bring in revenue. Consequently, it is characterized by rising premiums, limited options, and the imposition of more stringent underwriting standards.

This disruption will have an impact on everyone.

You might think “I haven’t had a claim, so why would my premium increase?” Premium increases are tied to both your specific risks and the overall insurance market. Across the United States, the cost of car insurance is up 19% compared to a year ago, according to August’s Consumer Price Index report. That’s the biggest annual increase since 1976. Home insurance premiums have increased an average of 21%, according to a Policygenius analysis of policy renewals from May 2022 to May 2023.

What are the factors behind increasing premiums?

  • Rising cost of home reconstruction and vehicle repairs.
  • Supply chain issues and labor shortages.
  • Escalated medical and legal costs known as “social inflation.”
  • A post-pandemic increase in auto accidents and fatalities.
  • More frequent and severe weather-related claims.
  • Challenges in the secondary insurance market (reinsurance) due to nearing capacity.

Learn more about increases in insurance rates in our article “Why is the Cost of My Home and Auto Insurance Increasing?”

We are committed to guiding you through these challenging times. If you’re considering making changes to your coverage, please reach out. We’ll help you explore your options and find the right solution for you.

What else can you do?

  • Review your policies and budget for rate increases.
  • Consider higher deductibles for savings.
  • Leverage telematics for safe driving discounts.
  • Ensure you’re maximizing all carrier discounts.
  • Maintain continuous coverage.
  • Pay your premium in full or use autopay.
  • Stay with your current insurance company, if possible.
  • Save insurance for significant losses.
  • Bundle policies for savings and stability.
  • Add alarm systems and monitors for better protection and discounts.

Home insurance costs have increased an average of 21% since 2022 | PropertyCasualty360
Car insurance rates just had their biggest annual jump in 47 years. This is why | CNN Business
The Insurance Hard Market: The Impact on Home Insurance and You – Watkins Insurance Group