Understanding the Hard Market of Insurance Continuing Into 2024

Insurance is an integral part of your financial security and fiscal stability. However, while homeowners, auto, health and other policies may provide versatile and robust coverage, they may also demand significant financial investments. Your regular premium payments allow you to maintain your insurance and the financial protection they provide; however, you may have recently noticed increases in your rates.

It may be particularly troubling that rising insurance prices may occur despite not changing your coverage or filing a claim against the policies in question. This unfortunate trend has affected many policyholders across the country in recent years as the insurance industry attempts to manage a hard market. While these circumstances may be largely out of your control, understanding current conditions may still help you manage and maintain an appropriate coverage portfolio to understand the current situation.

Making Sense of Hard Market Conditions

Like other components of the U.S. and global economy, the insurance industry is subject to various ebbs and flows influenced by many events and circumstances. Some of the most prevalent trends and patterns currently impacting market conditions include the following:

• Natural disasters—As hurricanes, wildfires and floods wreak havoc on property owners and incur record-setting losses, insurance companies have been tasked with paying out claims that have risen in both frequency and amount. In response, and as risk levels for these catastrophes continue to be high, insurers have had to raise their rates.
• Supply chain issues—The construction and auto industries have been adversely impacted by global supply chain issues that can be traced to the COVID-19 pandemic. As building materials and technological components continue to be listed at high prices, resulting costs, including for insurance claims and coverage, have risen.
• Reinsurance rates—Insurance companies often offset their own risk through a process called reinsurance, which allows providers to recoup their losses arising from claims. However, as claim frequency and amounts have increased, insurance companies must tap these resources more frequently, leading to rising costs throughout the industry.

How to Manage Your Insurance in a Hard Market

Amid these difficult times, cutting corners on your insurance coverage may be tempting. However, doing so can be perilous for your financial stability, as inadequate policies could lead to unmanageable out-of-pocket costs. Still, there may be ways to maintain appropriate insurance while limiting costs. Consider the following strategies:

• Bundle multiple policies (e.g., home and auto) under the same insurance company.
• Upgrade homes and automobiles with safer materials or security features.
• Limit liability risks, such as by removing attractive nuisances on your property.
• Adjust coverage, such as by increasing deductibles.
• Improve credit scores.

We’re Here to Help

Having served families and businesses for over 40 years, the dedicated staff at Garlesky Insurance Agency is ready and able to help you secure appropriate coverage while enjoying ideal rates. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.