Cancellations, Non-Renewals, And Policy Changes:
What's Ahead For Your Insurance
Current trends for your auto, home and business insurance, for both coverage and cost, are sobering at the very least. National news has been highlighting insurance woes in certain states like Florida and California, where insurance companies are either spiking the rates or choosing not to insure property in the state altogether. You may have experienced recent changes in coverage, price increases, and in some situations, coverage non-renewals or outright cancellations.
What is going on and what does it mean for you?
First, let’s examine the difference between non-renewal and cancellation. While both circumstances mean you can no longer continue coverage with the same company, the main distinction between them is whether the decision affects many people or only applies to your policy. Insurers issue non-renewal notices when they have decided not to renew an entire block of business for their policyholders. For example, they may decide they no longer want to offer homeowners insurance in a particular state.
The insurance company must provide ample notice of at least 60 days so you can bring your policy out of the non-renew status before the policy ends. This often means you need to get coverage from another insurance company to stay protected.
Cancellation, on the other hand, means that your individual policy is canceled with that company due to certain actions or inactions on your part. These include not paying your premiums on time, missing payments entirely, or not disclosing key information when you applied for coverage, among other reasons. In other words, you are the cause of your policies’ cancellation, and others under the same company are not affected.
Factors that affect your coverage:
1. Excess liability claims in the insurance region:
If you watch TV, you may have noticed all the advertisements for injury lawyers. All auto and homeowners policies contain a certain amount of liability coverage, which you can easily increase. However, when too many liability claims that require payouts are submitted, the insurance companies distribute the costs to everyone. Your premium goes up even though you haven't submitted a claim yourself.
2. Supply chain, labor, and other issues:
Due to world-wide shortages and labor issues, the costs of replacement parts, repair services, and labor have soared. Coverage amounts that were adequate in previous years may no longer be sufficient for your needs. Your policy will need to change to reflect this higher amount of coverage.
3. Business costs:
For businesses, the cost of Workers Compensation and other business losses have resulted in a much tougher environment to obtain competitive business policies. For example, renewal policies that I receive on behalf of clients have increased limitations and exclusions that didn’t exist previously.
Premium costs have increased markedly in all property, casualty and liability lines. No one is happy about this, but it is a reality we all must face.
My goal has always been to evaluate calmly and clearly all potential exposures and risks that face my clients and the insurers I represent. As an independent insurance agency, I can compare what is offered by different insurers when choices are available, so you are not locked into considering only one company’s offerings. While I am not always able to meet all of the requirements clients and insurers are looking for, I aim to find the best coverage for you at a reasonable cost.
If you have any questions about how your coverage or premiums may be affected, please let me know! I am here to work with you to maintain and improve your insurance plan.
Give me a call, even if you only want advice for a specific situation. There’s no obligation to obtain coverage from me. I’m always glad to help!