If you’re looking at your home or auto insurance renewal letter and notice a significant 40 to 50% plus premium increase, you’re not alone. Insurance rates have been increasing nationwide. Luckily, our agency can shop across all the available insurance companies to ensure you’re getting the best coverage and rates.
In our last update about the state of the home and auto insurance market in October, we advised that the market would be tough for the foreseeable future and high premium rate increases were to be expected. As we roll into 2024, much is still the same but there may be hope on the horizon.
Many of our insurance market representatives are advising that the home and auto insurance market will remain hard for much of 2024, however, as the market stabilizes, relief is expected for late 2024 and 2025.
What is a Hard Insurance Market
The hard insurance market is caused by several factors, but the primary cause for today’s hard market is the increase in catastrophic weather events, which again leads to a rise in claims. This has caused many insurance companies to tighten their underwriting guidelines, or even leave specific markets or not accept new business, like for example in California, Texas or perhaps most notably, Florida. As a result, the national average multifamily insurance rates have risen by as much as 50% from 2017 and are predicted to continue to rise in 2024.
As inflation eases and our insurance carriers’ financial states stabilize, more insurance carriers will re-enter back into the DFW market and rate increases should stabilize.
The new normal for most insurance carriers will be a mandatory 2% wind and hail deductible or “Roof Payment Schedule Coverage” for roofs for new clients and we may expect that this requirement could be slowly rolled out to existing clients as well in the near future. In late 2023, Germania announced that they were pulling out of the DFW and wider market effective immediately and all existing clients should expect their wind/hail deductibles to be at 3% on their home insurance renewal offers.
Roof replacement claims are the number one claim in our area so you should expect that tighter underwriter guidelines and more restrictive roof coverage will be rolled out to mitigate this ongoing crisis.
Although, here in DFW the insurance market seems dismal, we should all be thankful we do not live in California or Florida where a number of homeowners are being forced into forgoing insurance altogether due to the simply outrageous and unaffordable insurance premiums. Texas is considered a “catastrophic State” given our year-round hailstorms, tornadoes in December, and now record-breaking wildfires. According to an article in Insurance Business Magazine, the top five biggest home insurance hikes according to Policy Genius were as follows: Florida at 68%, New Mexico at $47%, and a three-way tie for third – with Colorado, Idaho and Texas at 46%.
Our advice is to keep patient as we all navigate this hard market together. We, here at ICUSA, continue to be available to talk through your options and shop your policies the best we can. Please contact us with any questions you have!