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How This Hard Insurance Market Can Affect Your Policy and What You Can Do About It

By September 21, 2023No Comments

Skyrocketing insurance premiums got you down? We hear you.

Unfortunately, we are currently in a hard insurance market. This means that insurance premiums are elevated, underwriting standards are tight, and the availability of coverage is restricted. It can be a frustrating time for policyholders, particularly when you have performed well under your policies and have not had any claims.

Hard markets come about as a result of a combination of factors. These may include an increase in the frequency and severity of claims, which drives the cost of delivering on policies up; less capital available from investors, inhibiting insurer’s abilities to fund new policies; and decreased competition, meaning insurers don’t need to extend themselves as far to secure a greater market share.

You may be left feeling powerless, wondering what you can do to combat rising premiums and secure a policy with ample coverage for your upcoming term. Your team at Nesbit Agencies is here to help. In this article, we’ll explain exactly how the hard market may be affecting your policy and provide some tips for navigating your insurance needs in these challenging market conditions.

The Impact of a Hard Insurance Market on Your Policy

In a hard insurance market, policies typically come with higher premiums, less coverage, and are harder to obtain as a result of more stringent underwriting criteria. This can be especially significant for policies such as auto insurance, homeowners insurance, or health insurance, because they are legally required in most states.

A hard insurance market can also mean you’ll be expected to assume greater financial responsibility for your policies with higher deductibles, have limited access to additional coverage, and have a smaller number of insurance carriers to choose from.

You may also find yourself unable to obtain coverage, depending on various factors. For example, property coverage may be more difficult to find in catastrophe-prone areas because the chances of a substantial claim are high. Furthermore, certain lines of coverage may not be readily available, such as commercial auto insurance for transportation firms.

How You Can Respond to the Hard Insurance Market

There are several strategic steps you can take to respond to the arduous landscape and manage your insurance costs effectively in a hard insurance market.

The first thing you might consider doing is bundling your policies, such as your auto and home insurance, with the same carrier. This can often result in discounts that help to offset rising premiums. Additionally, review your existing coverage to ensure it aligns with your current needs. Adjusting your deductible and coverage limits where possible and eliminating unnecessary coverage can help reduce costs without compromising essential protection.

To further mitigate the impact of a hard insurance market on your finances, focus on risk management practices. You can do this conjointly with your insurance advisor. Implementing recommended safety measures and loss prevention strategies will enable you to present a lower risk profile to insurers and typically result in more favorable rates.

Additionally, you should be doing your absolute best to maintain a clean claims record. This means avoiding small claims, which can negatively affect your claims history and lead to higher premiums.

Discounts—such as those for safe driving, home security, and telematics—are still available in a hard insurance market. Maintaining good credit can also help you qualify for discounts. Work with your insurance advisor to explore and compare the discounts available to you.

Furthermore, consider renewing policies early to lock in current rates. You should also be conducting an annual review of your coverage alongside your insurance advisor to ensure it remains relevant and suitable.

Stay informed about changes in the insurance market, industry trends, and regulatory developments, and consult with your insurance advisor often to help you make informed decisions about your coverage. Balancing cost savings with comprehensive protection is key, and consulting with a professional like Nesbit Agencies can provide invaluable guidance in this process.

In a hard market, shop around first and resist the urge to change carriers once you have signed on to a policy. Insurance carriers are sensitive at this time, and they are more likely to decline a policy if you are coming to them from another carrier. Changing carriers signals instability and risk aversion to insurance carriers at a time when they are placing increased value on clients who are stable and willing to assume some risk. Instead, we recommend working closely with your insurance advisor to research your insurance options and get it right the first time.

Navigate the Hard Insurance Market with Nesbit Agencies

Navigating this market is challenging, but when you work with Nesbit, we work harder to find solutions and present you with insurance options designed for your unique needs. Beyond that, we’ll provide numerous resources and ongoing support to help you to meet the criteria for your desired policies and secure discounts wherever possible. Once you’re approved, we’ll be on standby throughout the entire process with reliable service and advice.

We want to explore insurance solutions that work for you in the hard insurance market we’re in. Come visit us at one of our 17 locations across Minnesota (or our national locations in Scottsdale, Arizona; Hudson, Wisconsin; and the Greater Charlotte Area, South Carolina, for a free initial assessment or to review and/or renew your existing policy. We’ll see you soon.