January 29, 2024
Much is written regarding the state of the personal insurance marketplace in 2024.
An article in the Wall Street journal on January 8, 2024, maintains that “Buying home and auto insurance is becoming impossible.”
WSJ further assert that “For many Americans, getting insurance for both their cars and home has gone from a routine, generally manageable expense to a do or die ordeal that can strain household budgets.”
This memo focuses on two geographic areas: The Midwest, including Ohio, Pennsylvania, Indiana and Illinois; and the State of Florida. The Fedeli Group (TFG) provides thousands of personal insurance policies in these two regions of the country.
MIDWEST AT A GLANCE
Major price increases on home, auto, umbrella and recreational vehicle protection. Insurers say that they lost billions of dollars ($32.2 billion in the first nine months of 2023) because of weather related catastrophe claims; supply chain shortages and price increases on both materials and labor; and inflation overall.
Outright cancellation of policies; Insurance carriers refuse to accept new accounts.
Roof replacement provisions, especially those over 10 years of age; larger deductibles on wind/roof claims.
Auto policy price increases of 25% to 40% because of increase in costs to repair vehicles, primarily because of electronic components now contained in modern transportation systems. Vehicles are now being declared total or total constructive losses after an accident that, in the past, would not have been total losses by insurance carriers. Also, predatory insurance carriers, whose clients caused an accident are anxious to total not at fault driver’s cars to part them out because of the profit gained on used car parts.
Good credit is paramount: A good credit score as a first line of defense, which will allow The TFG to attempt to rescore credit with insurance carriers, as they base their pricing on an individual’s credit score. Significant variables arise when you have good credit versus poor credit.
FLORIDA AT A GLANCE
Major legislative changes were made in December 2022 by Governor DeSantis and enacted into law on December 22nd of that year. Good results are just unfolding from year 2022, which saw Hurricane Ian slam this state. Because 2023 had little weather-related activity, the law will affect the carrier’s results from 2022 into 2024, as the claims are settled.
Senate Bill 2A ends the era of one-way attorney fees. It repeals the fee provision has long governed property insurance lawsuits in Florida.
This now defunct law entitled an insured to reasonable attorney’s fees in ANY lawsuit in which ANY amount of recovery was awarded. The consequence of that leverage resulted in an explosion of litigation and the development of a cottage industry of contractors, mitigation companies and law firms formed to exploit the statutory scheme for profit.
The new statute deletes almost all references to attorney’s fees. In signing the Bill, Governor DeSantis eliminated the opportunity to bring frivolous lawsuits and reduce the burden of excessive and predatory litigation in Florida.
A second onerous practice has also been eliminated is the “assignment of benefits” issue. The Bill includes an outright prohibition on policy holders assigning any post loss insurance benefits under either personal or commercial property insurance policies issued after January 1, 2023. The benefit is that insurance carriers should be less fearful about litigating legitimate coverage disputes.
Whether you are located in the Midwest or Florida, TFG wants you to be aware of news and trends of 2024. Have questions or concerns? Please reach out to Debbie May (firstname.lastname@example.org) or Alaina Fausett (email@example.com) of our personal lines department to assist you today.
February 22, 2022
The famous actor and author Will Rogers once said, “You never have a second chance to make a good first impression.” You may ask what that has to do with your year-end financial statement? More than you might think. Contractors who need surety bonds must provide their surety with a CPA prepared year-end financial statement. […]
October 25, 2021
The pandemic, coupled with a hard market cycle, has forced brokers and insurers to prioritize risk differently. After waves of ransomware attacks and security breaches, it’s no surprise that cyber security and cyber education is top of mind in this equation. Cyber risk has taken centre stage with the shift to remote working models last […]