Page 20 - LA811

Did you happen to notice your insurance premium went up? Of course, that was only if you were lucky enough
to even get a renewal offer. Has your company asked the age of your roof – mentioning if it is older than 5 years, they won’t write Replacement Cost or perhaps won’t cover it at all if it is 10 years old or more?
Is something going on?
As a matter of fact, insurance companies themselves don’t fully know the answer to that. Weather events – tornadoes especially, wildfires, increasing costs of repair (and fewer professionals doing the repairing driving costs higher) – it’s almost a chicken-or-egg scenario.
There is considerable talk to change even the function of insurance itself – from “Repair and Replace” to “Predict and Prevent”! And have actuaries and Risk Managers even been trained for that?
Personal lines - auto and dwelling/ Homeowners – are seeing more and more carriers declining to write any new policies on homes; some are even reducing the number of new auto policies they will write – at least for the “time being”. So, if you get mad
at your current carrier’s prices, don’t think you can run next door to that other company and do any better. A lot of it comes down to– again – the cost of parts and labor. Not to mention the terrifying cost of new vehicles. (Who would have ever dreamed that the cost of a pick-up truck – off the line – could possibly run 6 figures?)
And Commercial Insurance? Property coverage – we are getting info weekly about the new valuations companies are requiring per/sq/ft. Some commercial buildings are being valued (for insurance purposes) at close to $300/ sq. ft. So, 1000 sq. ft will be valued at $300,000!
Remember, this isn’t about what
that building can be sold for! What’s driving all this is the price to replace
it if something totaled it – tornado, winds, fire (covered loss). And then where this building is located. Not the neighborhood, but is it in an area where a tornado has ever been/might ever be expected? Underwriters (the folks that
your area. If it is likely – never mind it hasn’t happened – too bad. They won’t quote it for you. Sorry.
I spoke with an agent just recently, and he said “I hate the business right now! There’s nothing you can do about it!” And no, it isn’t “price-fixing”.
It comes down to trying to figure the premium for the risk itself – enough to pay losses, and expenses and still make a small profit. One storm in Mississippi wiped out 10 years of profit for one company. Imagine!
Your agent isn’t doing this – things will get better! Just no one knows when it will. Most people know Louisiana and Florida have real insurance problems. But every state in the country has the same problems with pricing. No, they haven’t all had companies go bankrupt and not pay claims. Yet the “new” look Underwriters are having to take at every piece of business on the books and revalue, sending premiums up and up, translates into problems affecting everyone that owns anything – sorta kinda like everybody.
On top of all that, properties haven’t been re-valued annually at the same rate that goods and services have increased. So, never mind rate increases just getting buildings accurately valued for coverage is sending premiums skyward even without any rate increases!
It’s gonna get better – but no one knows if it is this or next or (sorry!) the next year. But it will. Hang in there!
Don’t
Kill Your
Agent!
By Virginia Reames, CPRO-W2
Home insurance costs for owner- occupied dwelling premiums increased an average of 11.3% in 2023, with 25 states seeing a rate change of at least 10% for the year, according to data from S&P Global.
Homeowners in Texas saw the largest rate increase in 2023
at 23.3%, followed by Arizona
at 21.8% and Utah at 20.3%. Texas and Arizona are two of five states – also including Oregon, Oklahoma and Colorado – that saw double-digit rate increases in both 2022 and 2023.
18 • Louisiana 811 2024, Issue 3
price insurance according to guidelines) have a “chart” of sorts which indicates the likelihood of damaging weather in