Top Reasons Property Insurance Rates Are So High in 2021

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Insurance rates for most Property Insurance coverage are increasing again for 2021 in the Midwest, especially in Oklahoma and Texas. We wanted to share with you some of the contributing factors for the increases:

  • Lloyds of London who re-insures most of the property carriers has been taking losses for several years in this line of business. It is our understanding they have plenty of capacity, but do not want to keep placing coverage and taking a loss on their investment. This is not a one- or two-year situation, but one that has been a problem for nearly a decade.

  • 30 Named Storms have occurred over the last 12 months a record number and 16 became hurricanes that hit landfall, which is the most ever recorded. Of these 16, 6 were classified as major hurricanes.

  • Wildfires have been numerous and have increased over the last decade many impacted highly populated areas—generating an estimated $13 billion in insured losses.

  • Tornados occurrences reached a record number in 2020 and hit 11 states, insured losses are estimated at $20B for tornados and severe thunderstorms.

  • Covid-19 has presented significant losses for the industry, not necessarily for Business Income, but in Event Cancellation Coverage and Manufactures Trade Credit Insurance. Although not a property item it still affects the carrier’s bottom line.

  • Political and Civil Unrest have generated over $2 billion in insured losses.

  • Insured Catastrophic losses increased to $67b in 2020 from $26b in 2019.

  • February Ice Storm is estimated to be $20 billion in insured losses.

  • Weather Predictions for 2021 storm season are not favorable. Many services are predicting a record number of convective storms in the Midwest. Due to ocean temperatures, wind patterns and other factors experts are saying the conditions
    are favorable for multiple occurrences of large hail and tornados. We have not had an F5 tornado in nearly a decade and the average is approximately 5-7 years in between them. Apparently, weather conditions are shaping up in a way that
    this may be a strong possibility, more so this year than others.

  • Number of Carriers in certain segments, such as multi-family, capacity is limited. Currently, there are only a couple carriers and programs that are significant players and several others that will consider multi-family risk, compared to the
    past when multiple options were available. Several other programs and carriers are offering renewals, but not entertaining new business. The programs and carriers that are still in the segment are increasing premiums and deductibles to try and become profitable and sustainable. If the current providers were highly profitable, we would see more carriers entering the segment.

Professional Insurors is one of the largest writers of multifamily risk in Oklahoma, we are one of the first places brokers, carriers and programs call when they want to enter this segment. We also have large volumes with the existing players, so we are positioned to get the best terms and pricing for our clients. We are reviewing each renewal and all new clients’ quotes to determine if there are better options. We understand insurance costs come out of your bottom line and work diligently to get the very best deal in the marketplace for each of our clients.

Contact us if you have any questions regarding your commercial policy plan!

Kelly Miller

Kelly is the President of Professional Insurors Agency, LLC. He has been a Certified Insurance Counselor (CIC) for 30 years; his training includes the Commercial Lines Training Program with Continental Insurance Company along with CIC and CPCU program classes.

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