Get Competitive Coverage in a Hard Insurance Market

Posted: April 21, 2020

In the fallout from COVID-19, we are entering into what is known as a hard insurance market. During periods like this, many insurance providers may increase their rates, offer less lines of coverage, or even fold completely, meaning less options for consumers. In this post, we’ll discuss the factors that contribute to a hard insurance market and how you can navigate this market to get the best coverage for your needs.

Contact King Street Agency today for a competitive insurance review.

Factors Contributing to a Hard Insurance Market

While consumers have enjoyed stable premiums and coverage options for some time, the market is firming. There are many factors causing this to occur. Here are some of the most significant:

  • Catastrophic events. Major storms, floods, and other unprecedented disasters like COVID-19 have led to heavy losses for insurance companies, driving up premiums.
  • Cost of claims. Perhaps related to the increasing frequency of catastrophic events, claims are also increasing. A rise in personal injury claims (both in terms of frequency and value) has played a major role here.
  • Low interest rates. Insurance carriers have had to balance low interest rates while working to overcome losses. Many companies are less prone to take on heavier risk, limiting who they may do business with.

Markets Heavily Impacted

While nearly ever market is impacted by an accelerated pace of hardening, property lines are perhaps impacted the most. Here are some of the coverage lines most impacted by the hardening market:

  • Builder’s Risk. Builder’s risk insurance can help to mitigate risk associated with a building project, but rates have been rising and coverage levels have been constricted in some cases.
  • Real Estate. While the entire real estate insurance market is impacted, the multifamily market has been particularly hard hit. Carriers are increasing prices and deductibles while limiting coverage.

What Does it Mean for You?

A hardening insurance market can lead to the following for consumers:

  • Increased premiums
  • More involved underwriting process (as carriers seek to better assess risk)
  • Limited coverage
  • Increased nonrenewal notices (as carriers drop or stall lines of coverage)

This is not to say that you should not seek coverage or that finding coverage at an agreeable rate is not possible. We just think it is important to highlight to our customers what is going on in the current market. At King Street Agency, we always work closely with our clients, leveraging our network of providers to find the best possible rates and coverage lines for your needs.

What Can You Do?

So, what can you do in this hardened market? Here are a few tips to help you navigate your insurance needs during this time:

  • Reevaluate your current coverage. Are all of your risks covered? Do you have too much coverage for your needs? Are more competitive rates available from other carriers? Have you received a nonrenewal notice for any areas? If so, what will you do to mitigate that new risk?
  • Improve risk management. Everything you can do to limit risk in your business can help to give confidence to insurers, which can lower rates or make new lines of coverage available to you.
  • Budget conservatively. Pad your insurance budgets by planning for the potential of increased rates. Be prepared for increased costs and plan accordingly.
  • Speak with an insurance professional. Get in touch with your insurance agent for professional guidance. Your agent will have deep knowledge of the market and how various carriers and lines of coverage may be impacted, so they can help you navigate your insurance needs during this time.

King Street Agency Can Help

The experienced insurance agents at King Street Agency can help you to navigate this difficult market to find the most competitive rates for the coverage you need. Contact us today to discuss your insurance needs.

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