In recent years the property & casualty insurance marketplace has undergone a series of transformations; the most obvious– and painful– are the significant premium increases being experienced across various sectors. Factors such as heightened claim frequency and severity, persistent inflationary pressures, and a troublesome uptick in legal system abuse have contributed to major adjustments in policy rates. These trends have caused a meaningful disruption in the individual and family budgets for personal insurance products.
Now that we are more than half way through the second quarter of 2024 it’s important to understand how the current landscape of the property & casualty insurance marketplace may affect your upcoming renewals. Since late-2022 the industry has been entrenched in “hard market” conditions which (among other things) is characterized by the decreasing availability of coverage and dramatic increases in policy premiums. Hard market conditions are influenced by a multitude of factors including an influx of natural disasters which are becoming increasingly destructive, labor and supply chain shortages, heightened inflation, escalating reinsurance costs, excessive litigation, and unfavorable financial market conditions.
So, what does this mean for your current or upcoming policy renewals? Regardless of account size, geographic location(s), longevity with current insurance provider, and claims history (or lack thereof), many of our clients have experienced net premium increases ranging from 20-30%+. Faced with such challenges, how can one maximize premium savings in these hard market conditions?
The Personal Insurance team at JKJ understands the impact of these premium hikes on individual and family budgets and is committed to helping you find relief. Below are six actionable tips to help you ensure the best combination of value and premium from your personal insurance portfolio:
Increase Deductibles:
Consider raising your deductibles to achieve immediate premium savings while minimizing the likelihood of submitting smaller claims. An abundance of smaller claims could not only negatively impact future renewal premiums but could also hurt your chances of moving to a new insurance provider in the future.
Bundle Policies:
Take advantage of companion policy premium credits by bundling multiple policies (home, auto, valuables, umbrella/excess liability, etc.) with a single insurance provider. This consolidation can result in premium savings ranging from 10-20% per policy.
Notify Your Insurance Company/Agent About Home Updates:
Inform your insurer about recent home upgrades such as roof replacements, electrical/plumbing system updates, or new HVAC installations. These updates may reduce current annual premiums or facilitate finding cost-effective alternative insurance options.
Consider Risk Mitigation Devices:
Install devices like burglar/fire alarms, low-temperature monitors, automatic generators, or water leak detection devices (with or without an automatic shutoff component). Many insurers offer premium discounts for these devices which have the added benefit of better protecting your home.
Explore Usage-Based Auto Insurance:
Some insurers offer usage-based insurance options that monitor driving behaviors over a set period and reward safe habits with immediate and future premium savings. Please note that while the majority of our clients have experienced significant savings for utilizing usage based insurance, some have faced higher premiums at renewal due to what insurance companies considered to be unfavorable driving habits.
Make Informed Claims Decisions:
During hard market conditions one must exercise caution when submitting claims. Insurance company underwriters are focused on maintaining profitability, so making informed decisions about when to submit a claim is crucial.
Rest assured that the JKJ team is dedicated to minimizing increases to your renewal premiums while maintaining comprehensive coverage and service excellence. If you have any questions or concerns about your upcoming renewals, please don’t hesitate to reach out.
Navigating the evolving landscape of personal property & casualty insurance can be daunting, but with these tips we hope you can make informed decisions to optimize your insurance portfolio and safeguard your financial well-being.
