You’ve already heard about how inflation is affecting everything, including insurance premiums and claims. Rates are rising and insurance is becoming harder to get. This situation is what we in the insurance industry refer to as a “hard market.”

What causes a hard market?

Hard markets are caused by many factors, these can include increased underwriting loss – a loss made by an insurance company in a particular period- , increases in natural disaster claims, increased litigation costs, and increased economic challenges. All of these factors make it more expensive for insurance companies to pay for claims and claims numbers are rising.

Here are three things you should know.

  1. Hard markets are cyclical or on a cycle, similar to the economy. However, we don’t know how long they will last.
  2. During a hard market, there may be fewer insurers competing for your business due to a decrease in interest for certain risks.
  3. A hard market causes coverage to be more expensive, and insurers also may reduce the amount of your policy limits – the maximum an insurer will pay for a particular type of coverage – or modify your coverage terms. This can leave you more exposed to paying more out of pocket.

What can you do?

Consider taking steps to reduce your risk, which could help you qualify for potential policy discounts or different coverage options. These discounts can include smoke alarms, burglar alarms, fire suppression systems, vehicle telematics, and water damage detection systems.

Work with your independent agent. Independent agents are able to continuously monitor market conditions and talk with insurance companies about upcoming changes to pricing or coverage terms and conditions. They can also evaluate risk management opportunities and resources to help you reduce your risk and provide you with specialized support related to your specific coverage needs.

As insurance premiums rise and policies become more restrictive or harder to find, you may be tempted to cut back on coverage or eliminate certain policies altogether. Please be careful! Doing so might create huge risks that could lead to serious financial hardship if you have a claim.

Consider other options that can be helpful:

  • Lower your risk by taking advantage of risk management techniques such as telematics, online courses, enhanced security, etc.
  • Raise your deductible or self-insure – setting aside a pool or money to pay for unexpected losses- some of the risk to help lower your premium, if possible.
  • Schedule a time to review your current policies with us to ensure you’re not overlooking premium savings opportunities or paying for coverage you don’t need. Also, let us know if you’re planning any changes that may impact your policy.

We understand that this can be a difficult time. Gannon Associates Insurance is here to help. Through consistent and thorough client communication, our agents are here to help guide you through it. Our agents will use their expertise and our broad market access to find the options that best fit your unique needs and budget. They will guide you through your choices, helping you to make a sound decision in your insurance coverage.

We understand the difficulties that accompany premium increases and reduced coverage availability. We’re here to support you in navigating the current market conditions. Give us a call at 877-GANNONS or visit our website at to get the conversation started today!