Published December 22, 2023 • Encompassinsurance.us • Buffalo, NY, USA
A recent posting by InsuranceJournal.com offered mixed sentiments on the status of personal lines insurance markets going into 2024. Consumers have certainly felt the pinch this year with most insurance companies tightening underwriting eligibility and simultaneously increasing rates, and consumers and agents alike are left wondering: where does it end?
Recent research from Standard & Poors Global Market Intelliegence webinar this week indicates that loss costs (the cost of a claim incurred by an insurance company) are trending downwards as inflation is starting to wane. While this is positive news, the BLS's consumer price index continues to climb, which makes many consumers wary that there is any relief on the horizon.
Industry wide in 2023, it was not uncommon to see rates creep as high as twenty or thirty percent higher when compared to 2022 premiums, even for those policyholders with clean claims histories.
Meanwhile, a day after the S&P's webinar, there was some discouraging news coming from Tom Wilson, CEO of Allstate in a commentary regarding their operations in California, Florida and New York regarding their appeal to three states to raise their current rates:
“If we don’t get price increases approved this year in those states (CA, FL, NY), we’re going to move from just not taking on new business to having to say goodbye to some existing customers." - Tom Wilson, Allstate
Certainly not the news that any policyholder wants to hear. If a carrier cannot file rate increases with their states, the only cost-effective option to reduce costs is to shed risk, in the form of cancellations / dropping exisiting customers.
Less than four years ago in the summer of 2020, Allstate completed its acquisition of National General Holding Corp. (NatGen) costing the provider nearly $2.2BN in cash. Earlier this year, National General and its affiliated entities placed a pause on new business in several high-loss cost states, such as New York.
🔔Advice from Our Agents
While costs are continuing to rise, the best recommendation we can make is to be as pro-active as possible when it comes to your insurance. Connecting with an independent agent, who can explore multiple carrier's pricing, is your first priority. Shop your coverage carefully, and try not to eliminate coverages if you can. Review your contract and understand that sometimes, maintaining your current policy may be your most cost effective option.
Zachary Tavolaro, General Manager of Jordan First Insurance near Syracuse, NY offered this insight for insurance consumers; "Do not, under any circumstance, let your current policy lapse or cancel without having new coverage in place. Doing so can and will cause premium increases upon searching for new coverage. Insurers want to see consistency in your coverage history, and a lapse of even one day can spell disaster for future insurability."
Encompass Agency remains committed to providing consumers with reliable and up-to-date information regarding all changes in the insurance marketplace, and offering practical solutions for your wallet.
Looking to discuss your insurance?
Connect with an Encompass agent to start your quote.
Call now 800-484-9712 or visit us online at www.encompassinsurance.us
Available 9:00 AM - 4:00 PM EST Monday through Friday
Serving the East Coast of the United States
Original Content Copyright © 2023, Encompass Agency, Inc. All Rights Reserved.