Have you opened your latest insurance bill only to be shocked by a 25% increase? You’re not alone. Many of our personal and business customers are feeling the pinch as property and casualty insurance premiums rise across the board. Let’s dive into why this is happening and what you can do about it.
Why Are Insurance Rates Increasing?
The insurance industry is currently facing unprecedented challenges. Over the past few years, we’ve seen price increases ranging from 10% to 30% across various types of personal and business insurance. Here are some key factors contributing to these changes:
1. Market Upheaval: The insurance market is undergoing significant changes that are affecting pricing structures across the board. While this may sound abstract, it directly impacts consumers by leading to unexpected premium increases. Even seasoned professionals have never experienced such shifts before.
2. Underwriting Challenges: Insurance companies are becoming stricter with guidelines to manage risk. For instance, older roofs are more susceptible to damage from storms, leading insurers like Travelers and Nationwide to set a 15-year age limit on roofs for new homeowner policies. This reflects a broader trend of mitigating potential losses in an era of unpredictable weather patterns.
3. Rising Costs: The cost of rebuilding and replacing properties has increased, leading to higher premiums. This is particularly evident in cases where previous coverage limits or estimated rebuilding costs for homes and commercial buildings were too low and have now been corrected.
Quick Fact: Rising Claims Costs
• Average property insurance premiums have risen by more than 30% since 2020, with wide variation by location due to increased disaster risks 1.
• From 2018 to 2022, those living in areas most affected by disasters saw premiums rise 14.7% faster than inflation compared to less affected areas 2.
• Experts predict that the frequency of extreme weather will cause home insurance costs to continue to rise in 2024 and beyond 3.
• While most insureds are still seeing rate increases, the pace has slowed, with average rate increases now in the 5% to 7% range for 2025 4.
What Can You Do?
While the increases are often unavoidable, there are steps you can take to mitigate the impact on your premiums:
• Utilize Discounts: Many insurers offer discounts for various safety features and loyalty. For instance, having a fire and burglary alarm system, a water leak detection system, or taking driver safety courses can lead to significant savings.
• Bundle Policies: Keeping multiple policies with the same insurer can also result in discounts. Consider bundling your home, auto, and other insurance needs.
• Stay Informed: We are committed to improving our communication with you. Expect more proactive updates about potential rate changes in the future.
Quick Tip: Save on Premiums
• Have a professional install a fire and burglary alarm system.
• Enroll in driver safety courses to receive a credit for three years.
• Bundle your home and auto insurance to gain additional discounts.
We know these increases can hit hard, and we share your frustration with the challenges in the insurance industry. Our commitment is to provide you with the best coverage and support possible. Take a moment to review your current policy and see if you qualify for additional discounts. If you’re concerned or just want to talk through your options, don’t hesitate to reach out. Contact Greg Magnus at 877-376-8676 x157 or email at for personalized assistance.
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Sources Cited
• 1: Disaster Risk and Rising Home Insurance Premiums – National Bureau of Economic Research
• 2: Managing the Climate Change-Fueled Property Insurance Crisis – American Progress
• 3: The Impact of Natural Disasters on Insurance Rates in 2024 – Bankrate
• 4: State of the Market – 2025 Outlook – Amwins
