Lockton, Inc. published an article in 2020 about why insurance carriers are increasing premiums and not renewing policies. The personal insurance market has continued to harden for several years and is expected to worsen throughout 2021. We would like to share a few things you should expect this year, according to Lockton, so you can prepare.
- California, Florida, and the Southeast coastline are considered disaster-prone areas. Residents should expect their premiums to continue to increase by 20% or higher.
- Factors such as demand, inflation, and labor costs are causing rebuilding and repair costs to skyrocket throughout the United States. These costs are driven up by when natural disasters hit and damage multiple structures, causing many claims at once.
- People in large cities will see rate increases largely due to non-weather-related water damage claims. This water damage can be caused by aging plumbing systems in multi-story residential buildings. The costs of temporary housing in large cities are also much higher.
How can you alleviate these issues?
- Increase your deductible to minimize your premium. This reduces the possibility of smaller claims impacting your insurability.
- Set up loss prevention techniques such as water monitoring systems with automatic shut-off valves, fire detection systems, and removing fire hazards. Doing so may even cause the insurance company to provide a premium credit.
- Pay your premium on time. If your policy gets cancelled due to non-payment, you will have to pay more to replace the coverage and give up coverage terms.
Contact E. R. Munro & Company to find out if your policy will be facing any changes.
From “Private Risk Solutions,” © 2020 Lockton, Inc.