Imagine you’re a diligent homeowner and conscientious driver who’s always kept up with insurance payments. Lately, you’ve noticed a significant uptick in your home and auto insurance premiums. Alongside the rise in costs, you’re finding that coverage seems to be shrinking, and the process for making changes or inquiries has become more rigorous.

The property insurance market, particularly home and auto insurance, is currently undergoing a significant shift.  We see this through Rising premiums, reduced coverage, and stricter underwriting standards. Nebraska has one of the highest average home insurance premiums in the country. We call this a “hard market.” While this may pose challenges for policyholders like yourself, being well-informed and proactive can help you navigate these changes more effectively.

Let’s take a look at the factors that have set us up for this market:

Premium Increases and Reduced Coverage:

Insured individuals are experiencing notable hikes in insurance premiums for both home and auto policies. Additionally, insurers are becoming more selective in the coverage they offer, introducing more exclusions into policies. This trend can leave policyholders with less protection than before.

Tightening Underwriting Standards:

Insurers are imposing stricter underwriting standards, making it more difficult for individuals to secure coverage. This means that policyholders may face increased scrutiny during the application process, potentially leading to higher premiums or even denial of coverage.

Factors Contributing to the Hard Market:

Several factors contribute to this challenging market environment, including inflation, supply chain disruptions, and climate-related events. These factors collectively put pressure on insurers to adjust their pricing and coverage offerings.

Impact on Policyholders:

The hard market has a direct impact on policyholders, who may struggle with affordability due to rising premiums. Additionally, reduced coverage can leave individuals vulnerable to unexpected losses. Moreover, the tightening underwriting standards mean that policyholders must navigate increased scrutiny when applying for or renewing policies.

How Can you as a Policy Holder Adapt to the New Market?

In light of these challenges, policyholders can consider several strategies to adapt and mitigate the impact of the hard market:

• Shopping around for insurance quotes to find the best coverage at competitive rates.
• Implementing risk management strategies to minimize the likelihood of claims, such as home security measures or defensive driving courses for auto insurance.
• Reviewing and understanding policy details, including any exclusions or limitations in coverage.

Consider Raising Deductibles:

As premiums rise, it may be advantageous for policyholders to consider raising deductibles, particularly if they currently have low deductibles (e.g., $1,000 or less for homeowners and under $500 for autos). By raising deductibles, policyholders can offset some of the premium increases and potentially realize significant savings. Furthermore, with the tightening underwriting standards, avoiding turning in small claims becomes increasingly important. Small claims can lead to higher premiums in the long run, making it financially beneficial for policyholders to handle minor expenses out of pocket whenever possible.

Contact Chastain Otis Today

The current hard market in personal lines property insurance presents challenges for policyholders, but proactive measures such as shopping around, implementing risk management strategies, and considering deductible adjustments can help individuals navigate this challenging landscape effectively.

Consulting with Chastain Otis, we can help you assess your insurance needs and select the right policies to protect yourself and your loved ones from life’s uncertainties. Remember, investing in insurance today can provide invaluable peace of mind and financial security for the future. Contact Us today to ensure you have the insurance coverage you need.