Rate increases are expected in this ‘hardening’ market
By Terry Tadlock
I think most of us are happy to bid 2020 farewell. It was a crazy year as COVID changed our lives and the way we conducted business — if we could conduct business at all. Well, the insurance industry is no different. Not only have we felt the effect of COVID, but we also had the worst year in history when it comes to tropical storms and hurricanes. We had 30 named storms, 12 of which made landfall in the US. Oh, there is more. We also experienced one of our worst years ever with wildfires in California and surrounding states. This leads to the question I get asked more today than any other, “What is going to happen to insurance cost moving forward?”
There is no doubt these factors have led to a “hardening” insurance market in South Carolina. The good news is it is NOT a “hard” market. A “hardening” market will see rate increases, but there is still availability of markets. This will enable a quicker recovery. In states such as Florida, Alabama, Louisiana and Texas, they are starting to see a “hard” market, which means rates will be increasing drastically (in some cases doubling) with very limited availability of coverage. These areas will be affected much worse than South Carolina.
I don’t think we will see rates as high as 1994 or 2006, but I do expect to see rate increases on average of 12 to 15 percent. Certain lines of coverage will feel the pain more than others. If you experience higher rate increases, it is an indication your insurance carrier was under pricing the market before this year’s issues took control.
Now more than ever it is important to have an informed professional insurance agent with options to help you navigate this market. We would love to help!
Terry Tadlock is president of Correll Insurance Group of Hilton Head.