The personal lines industry is currently in the middle of a hard market. A hard market usually occurs when there is a high demand for insurance and a low appetite to insure. This happens when insurance carriers steadily increase rates, non-renew clients, and stop taking on new business.
Recently, we have seen three major home insurance carriers stop taking new business and put in major rate increases from 15-30%. Reinsurance costs are increasing, which means if the carrier does decide to offer coverage, rates are going to be much higher than normal.
Insurance carriers are also tightening up their guidelines. They are very strict on loss recommendations to prevent claims. Roofs need to be updated within the last 15 years, water heaters and heating units need to be well maintained, and sidewalks need to be free of cracks. Overall, homes need to be in good condition for insurance carriers to continue to offer coverage.
Another major role in a hard market is increasing dwelling limits. With the rise of inflation, insurance carriers need to make sure you are insured 100% to the value of what it would cost to rebuild your home.
A hard market is a tough market, especially for clients who are used to paying a fraction of what it is going to cost. The best thing to do is to stay where you are and ride out the wave. Increasing your policy deductible is a good way to help reduce your insurance rate.
