Have you received your renewal?  Are your property insurance premiums increasing?  We are all shocked when we receive our renewal policy to find out:

  • The premiums have increased by double digits
  • higher deductibles
  • adding separate wind/hail deductible
  • adding per building/per unit deductible
  • coverage limitations
  • limitations on roofs

These are just a few changes being made to your renewal.  Property insurance carriers are insuring less and charging more as they try to recover from the past several unprofitable years.  Inflation is affecting everything including insurance premiums and claims.

Losses from storms, wildfires, wind, hail and hurricanes have continued at record pace. Also, the cost of inflation and supply chain shortages have substantially increased the actual cost of claims.  Be careful to watch your renewals for higher deductibles for wind and hail damage.

As more insurance company inspections are taking place, the carriers are being tougher on underwriting.  This results in more cancellations and non-renewals.  When this happens, it sends the consumer into a spiral to try and obtain coverage at a much higher cost with lower coverage.

High exposure areas such as frame construction, older homes or buildings, and claims are the main reasons that the reinsurance market is increasing their premiums.  This in turn trickles down to your premiums being increased.

What is reinsurance, you ask?  Your insurance carrier purchases coverage from the reinsurance market to transfer all or part of the risk.  When large claims occur, a claim to the reinsurance carrier is made for their policy to pay the larger claim.  The reinsurance carrier then increases their rates, which in turn increases our premiums.

We used to refer to replacement cost valuations when evaluating property.  Today we refer to reconstruction costs, which are much higher.  This increased property value also causes your premiums to increase.

Predictions are indicating that underwriting losses and higher premiums will continue through 2025 — resulting in these higher premiums continuing.

Please take the time to do an annual review with us.  As insurance premiums rise and policies become more restrictive, you may be tempted to cut back on your coverage.  Please be careful when doing this.  You may be creating a huge risk that could lead to serious financial hardships.