Understanding the Current Hard Personal Lines Insurance Market

The insurance market is part of the same national and global economy as every other industry. Even when considering small, local agencies and relatively standard coverage options, events and patterns occurring thousands of miles away could play a role in market conditions. The average individual and family may have little impact on certain trends influencing the personal lines insurance market, but by at least understanding current conditions, you may be better positioned to find ideal rates.

What Is a Hard Insurance Market?

Insurance market conditions can generally be categorized as “soft” or “hard.” In a soft market, insurance policies are plentiful and rates tend to be lower. Contrarily, in a hard market, policies may be more difficult to find and rates are typically higher to help insurers cover rising expenses. Nearing the end of 2024, the personal lines insurance is still experiencing hard market conditions.

What Influences the Personal Lines Insurance Market?

There are many factors that can influence the insurance market, including the personal lines segment. Consider how the following factors may play a role in market conditions:

• Supply chains—If supply chains are disrupted by pandemics, wars, shipping issues or labor shortages, it can increase the price of various goods, such as building materials, automobile parts and medical supplies. This can lead to increased prices, higher claims costs and greater premiums.

• Natural disasters—Hurricanes, earthquakes, wildfires and other disasters can inflict devastating losses on widespread areas. In the wake of such incidents, insurance companies may need to raise rates to recoup the cost of expensive and frequent claims.

• Reinsurance rates—Insurance companies typically carry their own coverage to assist with losses related to excessive claims. However, in recent years, reinsurance companies have had to raise their own rates, thus increasing costs for personal lines insurance carriers that are then passed down to the consumer.

How Can You Lower Your Rates?

Although the aforementioned factors may be largely out of your control, there may still be steps you can take to reduce your rates or limit any increases. Consider the following strategies:

• Bundle multiple types of coverage under the same carrier.

• Upgrade your home, such as with security systems, storm shutters and a new roof.

• Adjust your coverage. This may include increasing your deductible, although doing so will likely mean higher out-of-pocket costs when submitting a claim.

• Improve your credit score, as this figure is often used by carriers when determining your rates.

We’re Here to Help

Contact J J Insurance today to learn more about current market conditions and ensure you’re getting the best deal on suitable coverage.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.