(and it’s not so good!)

I thought it was time to give you a “fly-over” view of what I see in this insurance agency.  I can share, from management/ownership position information gleaned from our day-to-day operation, other agencies I communicate with within this area and region, plus the insurance home and auto markets across the country.  Bottom line: It’s not a fun time in any of it right now!  And the ones who will feel this tough stuff the most are you and me – the insurance customer.  Many of us are already feeling it!

Every day, we get calls:  “Why have my premiums gone up, and why SO MUCH HIGHER?

Let me give you a peek into what I see with bullet point facts.

CLAIMS: (in my agency alone – through October 31, 2023 – NOTE: just a small sample here!)

Auto:

• Teen driver – drove a LandRover in front of an oncoming vehicle – our insured vehicle was totaled. CLAIM PAID: $18K.
• Teen driver – hit median while trying to cross an intersection – totaled a 2020 Hyundai. CLAIM PAID (to date): $16,500. Possible alcohol involved.
• Teen driver – hit two other vehicles – CLAIM PAID: $23K
• Adult driver – not at fault, but another car struck our insured’s car.  CLAIM PAID: $19K.  (my client’s insurance paid this because the AT FAULT party didn’t have insurance.)

Auto Glass Claims (front windshields):

• 2021 Nissan Rogue – CLAIM PAID: $1800.00
• 2021 Land Rover – CLAIM PAID: $2068.00
• 2023 Tesla – CLAIM PAID: $1375.00
• 2021 Toyota Rav4 – CLAIM PAID: $1243.00

Home Claims:

• Wind storm – CLAIM PAID: $23K
• Wind storm – CLAIM PAID: $43K
• Kitchen refrigerator water line leak – insured not at home – CLAIM PAID: $45K
• Wind storm – CLAIM PAID: $21K
• Broken sewer pipe – major water leak in the crawlspace  – CLAIM PAID: $21K
• Catastrophic Wind loss – 3 giant trees fell on our insured’s home!  This claim will most likely result in a total amount of damage above $80K

That is a small list of less than 10% of the claims we have paid from this agency this year, and we still have seven weeks remaining in 2023.

Insurance companies respond to increased claims!

In common speak, insurance companies are basically ‘freaking out” that their claims LOSS RATIOS are abnormally high, which take deep cuts into their profits.  Here are the main issues that are causing the massive amount of claims this year – industry-wide:

• Distracted driving.  (it’s almost like the “bumper cars” we enjoyed at the county fair in our childhood.)  People are running into the back of vehicles because they are looking at their phones or big computer screen dashboards.  This is almost a common weekly problem in our claim filing.  With all of the technology in bumpers now, repairing such costs $3000 to $4000.  Yes, I remember when a “fender bender” (now verbiage of the past) was around $500 to repair.  Those no longer exist!  We had a claim like this just yesterday … our insured driver was at fault, and the police gave this person a ticket for the event.
• Roofs – I have one company that recently told us .. “we won’t even quote coverage on any home valued at any dwelling amount if the roof is older than ten years!  I’ve never seen that tight of an underwriting limit on roofs.
• Water – Water claims are nearly overwhelming for insurance companies today, especially in this region.  You name it – we have seen it!  We’ve had several claims from homes being flooded by bad toilet pipes or ice-maker tubing that become disconnected and floods a house to the point that it is unlivable for several months.  Pair with storms with heavy rain and winds – it is the most prevalent combination for claim after claim after claim on property!
• Trees are falling everywhere – most of them from storm-blown winds.  And the size of the trees is causing a lot of damage – both on the property plus the cost of removing them is a significant expense!

Insurance company rates:

Who is paying for all of this craziness!???  You and I!!!! That hasn’t changed.  If claims occur with any company in this country, the companies will make up for the losses in increased premiums. 

One of my companies, in the last 30 days, announced an immediate premium increase of 58% on their home insurance rate.  That will quickly affect customer renewals and new business written. I don’t think I have EVER seen that size of an immediate increase in my 45 years in this business.

Other companies are increasing their home insurance rates by an average of 15% to 30%.  That is a hard financial hit to anyone with any amount of home insurance premium.  Couple that with auto insurance rates increasing 10% to 18% or more!  That is the premium increase if you have not had any ACCIDENTS or TICKETS charged against you.  We won’t discuss what it’s like if you have experienced either of those!  It is NOT pretty!

Insurance companies management:

More than ever, I am reading and hearing about insurance companies working to “SUSTAIN” or “SURVIVE” in the marketplace.  I’m certainly seeing profitability decrease among most insurance companies this year.  Maybe you have read about insurance companies leaving Florida, Texas, or California.  Those states have been loss-leaders to many companies, and they can’t remain in business staying there.  I had one company executive tell me a couple of weeks back …” Benton, we have to restrict underwriting drastically because we are trying to STAY IN TENNESSEE and not pull out!”  That is serious when we see or hear these types of stories, but they are REAL!  We want these companies to remain here so we can continue to have competitive choices in helping our clients with the best solutions for their insurance. 

Several well-known names in the property casualty industry are closing regional offices, and people are losing jobs.  I read this morning (as I wrote this) that Liberty Mutual has laid off 2% of their workforce, or 850 workers, officially announced today!  Again, it’s real, folks!

So, what are we doing here at the agency to serve you during these times:

Unfortunately, we don’t have a “magic lantern” to touch and make insurance rates great for you.  We can assure you that we will keep as close an eye as possible on the policies you have with us.  If your rates for insurance exceed normal market pressure limits, we will research alternatives for you to help reduce premiums.  I must admit, however, that the choices are narrowing these days for better alternatives.  I’ve had some great customers tell me they wanted to shop their portfolio with us to be sure our rates work for them.  All but one came back to me saying they found nothing better, and our 5-star rated service matters! So, they remain with us. Of course, that is good news for us to hear because WE KNOW SERVICE MATTERS.  That’s why we continue to use it as our service basis: “Treat others as we want to be treated!”

I commit this agency to the following:

• We will personally answer our phone!  We don’t have a phone bank in another part of the world initially answering our phones.
• We will know who you are!
• We will speak a language that you can understand!
• We will remain INDEPENDENT – which gives you choices of companies to choose from with us.  These one-company-only names you have heard of are some of the hardest-hit companies – suffering the most during these times.  They don’t have any choice except for their one product!  We have flexibility with several companies we offer you!
• We treat each customer’s issues as if they are our own. 

We might as well shut the doors the day we stop doing the above.  Understandably, those items matter to most of our clients.  Some show us their support for what we do simply by showing loyalty to our work – some as long as 40 years.  I often hear ….” You’re the only insurance agent we have had since we were married 42 years ago.”  That’s one of our greatest rewards for what we do.

The Future:

Who knows!  I’ve never had a crystal ball! 😊 However, I have experienced this similar environment thrice during my career.  Market pressures from inflation, the jobs market, pricing, inventories of building materials, and car parts are pieces of this complex pie!  Add to that insurance companies tightening their underwriting regulations by implementing what I call a “cherry picking status!” (they only want the BEST homes or autos with the least claim risk!). A lot goes into that insurance policy you have with us, and we are doing our best to stay on top of issues that will affect you and your rates.

PLEASE NOTE: Your policy(s) may not face a dramatic premium change. Based on your age, risk, and other rating factors, you might glide through this next year, where you will experience minimal rate changes that are not so different than what you have known. Every policy and insured is different. This review gives you background education so you will be aware of the insurance market from a broad perspective. Here’s hoping your rates don’t change much!

How long should this last?  This is a cyclical climate both financially and certainly in the insurance world.  Don’t quote me, but I HOPE to see things level off and become more tolerable in the next 12 to 18 months, barring any pandemics or additional financial crises. 

In closing, I apologize for the length of this much longer than usual blog post.  This material hopefully gives you a better – more educated picture of what you may experience with your insurance. I want you to know the truth as best as I know it.  Education breeds understanding in my world!  So, I’m glad to spend this time to be sure we are all on the same page! Please let us know how we can help you.  TEXT or CALL 615.377.1212 or visit our website at BentonWhite.com. We still want to “earn” your business!