Get ahead of rising premiums in 2020
Increase in volatile weather conditions such as floods, tornado and hail, and frequent wildfires has caused property insurance carriers to increase their premiums, while capacities continue to shrink. In this article, find out how your HOA may be impacted and how you can protect your HOA against the soaring premiums in 2020, by switching your policy now. Because an unexpected claim could block eligibility later.
Trends for the new year
As the year comes to an end, USI’s reports that for 2019-2020, insurance premium rates have consistently risen in a number of coverage areas by up to 60%. This direction is set to continue into the first part of 2020 and throughout the year, making it a cause for concern for those who live in areas likely to be affected by natural disasters. Additionally, there have been reductions in coverage that will, without a doubt, affect HOAs. On top of this and more alarming is the number of non-renewals that are expected, due to the volume of demand on insurers as HOAs scrabble around to find a more competitive rate, as well as reduced capacity as discussed below.
Why are insurance carriers increasing premiums?
Property insurance carriers have witnessed a significant decrease in profits due to an increased frequency of extreme weather conditions, wildfires and non-flood water damage. Alongside soaring premiums, many carriers are either exiting or severely reducing capacity in areas most likely to be affected by natural catastrophe. This is because providers have endured a surge in natural catastrophe or CAT related losses over the past few years. Many of the those incurred over 2017 and 2018 continue to have unexpected developments, costing insurers even more money. It is our opinion, based on current trends, that this loss adjustment will continue into 2020, which is, of course, bad news for HOAs.
As a HOA what can we do to minimise our insurance costs in 2020?
If you live in an area likely to be impacted by natural disasters, floods or wildfires, rising insurance premiums have the potential to significantly affect you in 2020. Furthermore, the decrease in capacity could mean even more monetary loss in case of damage and the need to hike those mandatory HOA fees. As evidenced by USI’s recent market trends report, your insurance carrier is likely to keep balancing their profit margins by increasing your premium throughout the next year. That is why we advise you to get ahead of this trend and renew your premium as soon as possible, ideally, before 2020. This way, you’re giving yourself a chance to retain the current price of home insurance into the new year and prevent further increases to the HOA’s mandatory fees and running costs. Industry thought is that rising premiums are not expected to slow down any time before the end of 2020, as providers continue to compensate for the losses they incurred over previous years. With the number of large scale wildfires and earthquakes, claims have really taken their toll.
Get in contact today to see what we can do
If your HOA has a claim between now and your renewal period, you won’t be able to switch either. So beat the rush, contact customerservices@sliains.com for a comparison quote and find out about fixing and switching carrier now. We offer Insurance companies other agencies do not offer, that could lower your premium.
