Auto and Home Rate Pressures and What We're Doing

April 11, 2023

The insurance industry has been heading towards what we call a "hard market" due to unfavorable macro and micro trends. The personal lines market was hit hard by the pandemic. While people adapted to the new normal, living and driving trends drastically changed. People were spending more time in their homes which resulted in a higher frequency of accidents. Pair that with the rapid increase in cost of construction and materials, and home insurance companies quickly faced claims pressure. The frequency of auto claims initially dropped since people were driving less and the industry rightfully gave customers 2 month premium rebates. When people started driving again, claim frequency went back up at a time when the cost of parts and labor were abnormally high due to inflation/supply chain issues. "No Fault" Medical costs were also higher than usual.

In NYS, our insurance companies have to file rate increases for justification and approval by the Dept of Financial Services. During the pandemic, DFS put a 5% cap on rate increases, at a time when companies really needed more than that to stay profitable. Once the state ended the 5% cap at the end of 2022, insurance companies piled in to get their long needed rate increases to stabilize their poor loss ratios. This has led to an environment where insurance premiums are generally higher, coverage options are limited, and underwriting becomes more strict than we're used to.

Even in a challenging market, our job as your Independent Agent is to continue to provide value the best we can.

Evaluate Coverage Needs: 

  • Providing us with information to properly assess your risk exposure can help us understand what types of coverage and limits you need.
  • Our Policy Review Surveys are great for this and can be found here: Auto or Home

Advise on Risk Management: 

  • There are 4 areas of the home where age, condition, and quality can significantly affect premiums.
  • Having your Roof, Furnace, Plumbing system, and Electrical system less than 20 years old will typically get you the largest credits.

Uncover Eligible Discounts: 

  • The above surveys can also remind you of available discounts for both auto and home. 
  • If you're driving less, let us know so we can update your policy.
  • Accident Prevention Course - 10% discount through
  • Telematics- the auto insurance industry is moving towards “User Based Rating”. Carriers are eager to offer discounts to safe driving habits. Rating based on age and credit scores will be used less often, and will really look to the way individuals actually drive. Car manufacturers and their onboard computers will soon be able to provide all the data that insurance carriers are looking for. This will allow the rates to be hyper personalized to the way people drive, rather than other, more general criteria. This is a fun conversation I’d love to have with anyone who will listen!

Shop for Competitive Rates 

  • We "remarket" as many policy renewals that we can. We have a system of finding the largest, unjustified increases and shop those policies with our 7 carriers. 
  • We are finding our requote conversion % has dropped from 30% to 20%, meaning we are finding better options less often, even after taking a large increase. All we can do is keep trying.

While we can't predict the future of premiums, industry leaders are hoping rates will stabilize over the next 12 months.

We thank you for your continued trust!