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American Insurance NW Inc. Blog

All You Ever Wanted to Know About Insurance

Harsh Realities - Property Insurance Crisis

We hear this question multiple times every day… Why did my Homeowners Insurance premium go up so high?

You deserve an honest answer and you can count on American Insurance to tell you the unvarnished truth. We are on your side!

The short answer is “rapidly rising claim costs”. The pandemic triggered a chain reaction of construction repair cost increases, supply chain issues, and unexpected high inflation, followed by huge increases in climate driven claims. This created a property insurance crisis (homeowners, rental properties and commercial buildings) that started in Florida and California and has now spread to every state. (for a deeper dive read: Homeowners Insurance Crisis Spills Over to Northwest. )

Insurance Companies React: It has been the perfect storm for insurance companies, who have scrambled to adjust rates and tighten underwriting requirements to slow financial losses. Reinsurers have made major changes in their operations and made large double digit property premium increases to insurance companies.  All insurance companies have restricted new business writing of property insurance, tightened underwriting, cancelled Homeowners policies and have substantially raised Homeowners Insurance premiums for remaining customers.

WHAT SHOULD YOU DO? No matter which insurance company insures your home or business properties, you will receive a large and unwelcomed premium increase. The average premium increase is +40% - some lower, some higher.  The frustrating part, both for you and for us, is that tight underwriting (hard market) will frustrate any efforts to re-shop property insurance policies right now.

CHANGING POLICES IS RISKY! The problem is…even if we can get you a lower premium quote from another insurance company, they will immediately inspect your property and unless everything is perfect, they may cancel the policy, leaving you to scramble for more expensive coverage. So, if you have not been canceled and have been offered a renewal, even if at a higher premium rate, it is best to just hang-on!  

Check in with us! We will make sure you are getting every available discount.

 We watch the marketplace closely and are in the best position to assist you when market conditions stabilize.