I wanted to let everyone know the rate conditions of the insurance companies. You might say, “I would rather poke a needle in my eye than read something on insurance”. I think most people would agree. However, this does impact all of my clients, business and personal.
I have had a few conversations these past few weeks with some national and regional insurance companies. All of them are informing me that rates are going up in 2020. Many factors go into rate increases and today I will not get into the weeds to discuss them, but just give you a simple review of some of the reasons why rates will go up in 2020.
The first is auto, from commercial to personal, rates have been increasing yearly for several years in a row. Driving these rate increases are more people are driving more miles. With gas hovering around $2.50 per gallon (+/- $.25 depending on the news of the day or who sneezed in Washington), more people are driving more miles. The vehicles we are driving are newer, they have more safety features than ever before. A simple backup hit on your bumper no longer is a quick fix for $500. That bumper requires a computer to reattach all of the electronic components costing $3000. With all the driving = more accidents and people are getting hurt. Those that are hurt go see the doctor and remember, all of us are experiencing higher medical costs with our own health insurance, and so does the auto insurance companies. But they get to pass those increases on to you 😊 Fair or not, someone has to pay. I could go on, but I think you get the point. Now on to the property.
Hurricane this, Hurricane that, wildfire this and wildfire that. Oh, throw in Monsoon rainfall of 5+ inches a time or two, and don’t forget a flavorful tornado with high winds and what does that make? Higher property rates for commercial and personal clients. No, I am not getting into any controversy about why it just is. Oh yes, take a look around your home area and what do you see, construction of homes and businesses everywhere. More buildings = more abilities for the weather to give insurance companies a headache with claims. They are seeing more claims from a storm now than just 10 years ago. Again, I could go on and on.
So, Mike what does this all mean? Your insurance costs are increasing in 2020 and more than likely, upper teens (15%-19%) across all lines. I get it, no one wants to spend more money on insurance, I didn’t have any losses this past year or two. True, but some of you reading this blog did have large losses, much bigger payouts than the increase of what we are going to experience in 2020. The moto for 2020 is “double-digit increases is the new norm”.
If you would like to discuss, give me a call anytime or just stop by the office for a coffee break. I love to talk. Until next time, take care.
CEO, The Ragnar Group