Wondering why insurance premiums are rising significantly? Here is a brief explanation:
Insurance premiums are going up in the 15%-25% range across the board, and sometimes even much higher. This primarily reflects the rising cost of building materials, mostly due to inflation and supply chain issues in the last year or so. Labor costs are also trending upward.
The private U.S. property and casualty insurers also recorded a net underwriting loss for 2022 of $26.9 billion (compared to 2021 where that number was ‘only’ $3.8 billion). These numbers are in large part due to the increasing costs of doing business (inflation), natural catastrophes, and rising legal fees absorbed by the insurers. These large insurance companies obtain their own insurance (referred to as re-insurance) and losses in the billions have caused the cost of re-insurance to increase significantly, which often trickles down to the individual policy holders.
Another factor is that at least six insurance companies insuring homes along the South Carolina coastal region went out of business in the last 12 months. Insurance claims from Hurricane Ian will probably force a few other companies into bankruptcy in the near future. The result is less competition and thus higher insurance premiums for everyone.
For our current clients, we are happy to review your home insurance policy prior to its renewal. Being an independent agent allows us to compare your current company’s premium with premiums of other carriers. You can expect your insurance costs to go up, but you can also expect us to try to minimize the increase when possible.
If you are not currently a client and have experienced these increases or have experienced your insurance company going out of business, we are happy to review your policy and help identify replacement coverage that meets your needs.
(Since we first composed this blog several months ago, numerous insurance companies have announced plans to stop writing insurance along the coast and will be non-renewing all their homeowners policies. Other companies have ceased writing new policies in certain coastal zip codes but will continue to renew policies.)
What CTL is doing for you in response to rising premiums and non-renewals:
Because these rising premiums are making a huge impact on our area and clients, CTL has put together a remarketing team whose focus is to handle the incredible volume of large premium increases within our accounts. Timing can be a factor with new quotes- for instance you may get an increase letter or a non-renewal letter from your carrier 60-90 days before your renewal, but some carriers only allow for quoting 45 days prior. Many times, we find out about non-renewals that same day as you do.
C.T. Lowndes & Company is an independent agency who is contracted to write insurance with many different insurance companies/carriers/markets. Our goal is to help customers find the market that is going to best fit your needs while meeting carrier guidelines at a price point that will work for you. If the market changes or a risk no longer fits a carrier’s appetite then they can decide to non-renew a policy. Independent agents have no control over this process and we are typically sent a non-renewal notice at the same time as our customers. The good news is we often have other markets to turn to and can shop your insurance. This could even result in us helping customers find a better market from a cost and/or coverage standpoint. Our team is always happy to discuss any of the above and/or review your policy to try to find you a better solution.
We hope this gives you a better understanding of what is happening currently in the insurance industry and how we are able to help.
Interested in reading more? check out this New York Times article
