What is causing insurance premiums to rise and what can you do to save some money? If you know what’s causing this problem, you have the opportunity to take action and/or work with an insurance agent who can help.
How Much Have Insurance Premiums Increased?
As of the third quarter of 2021, insurance rates are still climbing. The average premium increase across all commercial insurance types was nearly nine percent, a noticeable difference for even those with “affordable” insurance plans. Pricing for all lines of increase rose 8.9% after increasing 8.3% in the second quarter, with only workers’ compensation costs dropping.
One of the newest forms of insurance—cyber insurance—skyrocketed in price by over 27 percent. As a result, underwriting in the insurance industry is more stringent than ever. In many cases, insurers took a hard line on cyber insurance, a segment of the industry that is historically underpriced. As more business owners realize they are vulnerable to cyber attacks, data breaches, and hacking, cyber insurance premiums are likely to continue to rise.
What’s Causing Insurance Premiums to Rise?
There are several factors influencing insurance prices. First and foremost, the COVID-19 pandemic caused upheaval across the insurance industry. Insurance underwriting and investment dropped as employees went home, businesses closed, revenues shrank, and there simply wasn’t enough money for expansive insurance policies.
Businesses that were trying to stay afloat might have dropped customized insurance plans they deemed unnecessary. For example, a business might have dropped its property insurance because the office closed and everyone went home.
Companies managing distribution and storage dropped insurance policies for the facilities they closed, and business auto policies were no longer needed if employees weren’t present to drive those vehicles.
If you had to let go of a percentage of your workforce, you likely shed a portion of your workers’ comp plan to account for the lower employee count.
As employees return to work, insurance costs are rising once more. Increases were most prevalent in:
- Commercial property
- Commercial auto
- Workers’ compensation
Insurers have noted that drivers got back on the road, courts reopened, and severe weather made the situation that much worse. Additionally, insurers are discovering that there are several more forms of insurance employers need, especially as their workers go (or stay) remote.
What Should You Do When Your Insurance Premiums Go Up?
When your insurance premiums rise, your first response should be to reach out to your agent. The best resource for your insurance policy is the agent who helped write it.
Additionally, you can make changes to the coverage or carrier that will help you save money. You can make adjustments to:
- Coverage levels
- The carrier
- Available discounts
- Customized or industry-specific coverage
At times, you can bring down the price of your current policy, especially if you prefer to work with a certain carrier. However, there are times when your current carrier simply cannot give you the savings you need. Reviewing new policies with your agent will save time, and potentially, cash you need to run your business.
Contact Us to Review Your Current Insurance Policy
Please contact us if you have any questions about your premiums or coverage. We’re happy to review your current policy, help you save money, or offer a quote for a new policy.