There’s been some tough news for insurance policyholders as we move through Q1 2024. Most rate analyses have shown insurance premiums increasing as the year goes on, driven by numerous factors in the economy, the environment and within specific industries. In fact, it seems like few verticals will be spared from some insurance premium increases over 2024, whether it’s for policies covering home & auto, health, life, or property.
Why are my premiums so high?
Since the insurance business is (like any other business) driven by profit and repelled by cost, stresses on insurers’ bottom lines must be made up somewhere in the chain of transaction. When policyholders start to feel the pressure on their pocketbooks from their insurers, it is most often a downstream result of an increased cost of doing business.
In fact, since insurance is a state-regulated industry with limits on rate increases in place, it can be more difficult to get insurance at all during these times. With higher costs, limits on rate increases and insurance pool size growth - but more demand - there is a lot of pressure at play here.
Passing it on
In 2024, these are the pressures that will affect insurers, and their clients (you, the policyholder) in turn:
New Threats
As water levels rise and floodplains & fire zones expand, additional high-cost coverages are needed
Rising Prices
When it costs more to pay for a medical device or service, it ultimately costs the policyholder more
How much to repair?
With stressed supply chains and damage to homes and autos becoming more common, prices for repairs grow
HOW much to repair?!?
Increases in the amount of tech in vehicles means higher repair and replacement costs for components
Help Wanted
With inflation stressing the cost of goods, upstream suppliers offset their costs in their pricing, and fewer employees means declining access to quality plans
What can you do?
Taken together, these factors forebode poor loss ratios for insurers, which will certainly be passed onto the consumer.
While some of these factors are transient and subject to business cycle pressures, others may be more permanent. Regardless of the reason your rates are increasing, the pros at Ansay & Associates are more than willing to work with you to find a solution and help you reduce your costs.
Your Health
In what has become a steady drumbeat of a warning within the industry and without, the perennial issue with health care coverage increases boils down to price growth for services. However, since negotiations between providers and insurers often take longer than a year in the healthcare industry, many analysts expect the inflation felt in other parts of the economy to finally affect the healthcare/insurance industry in 2024.
Besides provider costs adding upward pressure on insurer prices, the cost of labor for insurers and providers (and all employers, really) is expected to influence the premium costs of policyholders. As these entities strive to fill administrative duties, their costs are expected to rise and affect policy premiums accordingly. More unfilled administrative positions may also influence access to policies.
Many insurers are anticipating growth from last year's numbers, but most don’t see increases in the numbers of policyholders as contributing to premium rate hikes as much as the increasing cost of doctor visits, hospital stays, medical equipment, drugs and other care cost drivers. It will be the pressure from the increased costs of care that move the needle most on health insurance rates.
For those enrolled in long term care, the Federal Long Term Care Insurance Program (FLTCIP) has increased its premiums starting in 2024. Those enrolled will have the option to do one of the following:
Your Home
The biggest reason for home insurance rate increases over the past few years has been the increasing cost of materials and labor, along with increases in policy utilization. Material costs have remained high through supply chain issues of the 2020 pandemic and into the inflation period that is only slowly improving in 2024. This, coupled with increasing natural disasters causing elevation in claims (approximately $93BN in weather & climate disasters in 2023), has resulted in some national insurance agencies pulling out of certain areas of the country to limit their claim exposure. While this can save the insurers costs, it can also have detrimental effects on policyholders and those who are suddenly without coverage.
Those left in the wake of these departures or reductions in service areas may be left with more expensive and less cost-controlled options in the Excess & Surplus insurance market. Homeowners who are fortunate to still have coverage may also see an increase in rates due to fewer policyholders paying into an increasingly risky insurance pool.
Your Vehicle
Cars are becoming safer and more efficient all the time, which is good news for consumers. But these improvements come with a downside - the technology used to achieve those advancements are expensive. With increasingly specialized components and higher costs of labor to work on them, repair and replacement costs have jumped, which means car insurance rates will react similarly.
Ongoing (if not improving) supply chain issues causes additional strain on component availability, but other factor may play a bigger role in car insurance premium increases due to increased utilization.
These may include:
What can you do?
As we’ve learned there are a web of related factors that result in elevated insurance premiums. But there are also ways for coverage holders to reduce their impact and potentially lower their premiums:
Contact our Team & Save!Sounds like a lot of work, but the savings are out there. Comparing different insurance providers will help you find the best coverage at the most affordable price. Ansay’s brokers will work with you to find the appropriate coverage at a reasonable cost.
Life changes, and so do your insurance needs. Reviewing your coverage annually helps ensure it still meets your budget and your coverage requirements. Talking to our brokers and risk management pros is a great start.
Insurance companies often lend discounts for things like bundling multiple policies, having a good credit score, and a clean driving record. Policyholders should ask about any potential discounts for which they may be eligible.
Insurance premiums are often based on the level of risk associated with the insured. By taking steps to mitigate risks, such as installing security systems, fire breaks or participating in safe driving courses, you may be able to lower some of your premiums.
If your insurance premiums are exceedingly high and you can afford a bit more risk, in many instances you can increase your deductible in exchange for a lower monthly premium. Ansay’s team of insurance experts can help you negotiate these rate changes, if they work for your needs.
In the face of rising premiums, your insurance agent or broker will become your best resource in keeping your coverage where you need it at a price that’s as reasonable as possible. Your first step should be to reach out to your insurance agent and let them help you navigate these increases.
Lower payments might just be a conversation away if you reach out to the experts at Ansay & Associates today!
Ansay & Associates Partners with Ironwood's Brookside Insurance Agency
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