I've had no claims. Why is my insurance premium increasing?

Premium increases are not just tied to your specific coverage, but to the overall insurance market.

Currently, the insurance industry is experiencing a “hard market,” which means that the overall cost of claims for insurers has risen, and there is less competition. This makes insurance coverage more expensive. Inflation has significantly increased the prices of goods, especially for labor, construction, and auto repair materials.

Insurance companies have experienced a significant gap between the policy pricing they projected using prior loss data and their current claims payouts. This gap contributes to the current hard market.

Insurance companies are raising rates and restricting their capacity – their willingness to accept new or increased risk – to insure families and businesses, making it more expensive and difficult to get the coverage you need. Insurers, too, buy insurance, called reinsurance, to transfer some risk, and reinsurers have raised prices as well.

How can I get a better rate on my policy?

It depends on your policy and insurers’ appetite for that type of coverage. Sometimes, another insurance carrier may offer the same or better coverage for a more affordable rate.

Your rates typically aren’t just affected by the insurer’s practices but also by other factors like overall market conditions and your specific risks. For example, if you’re a contractor, such as a roofer, you may see higher premium increases than those in other trades, such as landscapers, because your operations create a higher risk exposure.

The same holds true in the personal market, where a home located in a storm-prone area presents a higher risk profile for insurers than one located in an area with little exposure to storms.

Changing insurance companies, however, can have unexpected results.

For example, switching companies too often will affect your rates and may cause you to lose loyalty discounts. (Like switching from Progressive to Safeco) Your agent understands the current environment and the factors that affect your risk picture and can discuss your options with you.

It is always a good idea to review your policy with us so you understand what coverage you have. If you want to change insurers, ask us about how the switch could affect your coverage and your risk profile.