Home insurance remains one of the most frequently purchased types of coverage across the United States. However, hard market conditions have made acquiring an adequate policy more expensive and complicated for many people. Indeed, major insurance carriers have already limited or ceased offering certain types of insurance in some parts of the country—areas that were eligible for policies only a few years ago.
2024 Homeowners insurance market outlook & factors affecting the industry:
2023 was a turbulent year for the homeowners insurance market, as well as the industry as a whole. Some of the top challenges include inflation, climate-related losses, and reinsurance rates on the rise. So, what can we expect this year?
Since many of the primary factors that affected the homeowners insurance marketplace in 2023 have not been alleviated, it is no surprise that the market is expected to remain hard. Premiums are expected to increase or stay elevated in the near future. Furthermore, insurance companies may be more meticulous while assessing home conditions and risk levels, potentially further increasing rates or making it more difficult to renew or acquire coverage in the first place.
Key factors to watch in 2024
- Inflation
- Severe weather events & natural disasters
- High loss cost severity
- Building material supply chain struggles
- Government reforms
Personal liability trends – growing litigation risks & costs
Both the frequency and dollar amount of liability claims, especially those related to car accidents, are on the rise – and your risk may be greater than your current limits, leaving your personal assets exposed.
That’s why it’s critical to adequately protect your financial future in the event these disastrous trends impact your or your family.
Chubb’s 2023 Wealth Report study found that while 92% of respondents were concerned about the size of a verdict against them if they were a defendant in a liability case, only 36% hade excess liability insurance.
The liability coverage that comes with your home or auto policy will provide some protection in the event you are in an accident injuring another or someone is injured at your home, but may be inadequate in the event of a lawsuit.
A personal excess liability policy can help safeguard you when the underlying liability limits of other policies aren’t enough to cover the unexpected costs of a lawsuit or accident.
Liability claim statistics & the growing cost around them
Increased frequency & severity of liability claims
- Pedestrian fatalities are trending upward – they surpassed the largest number seen in over 40 years and continue to rise.
- Homeowners with significant, visible property assets can be a target for claims such as: slip and fall, dog bite, and other occupiers’ liability claims.
- A report by Cambridge Mobile Telematics indicates that auto accident fatalities are dramatically on the rise due to increased incidents of speeding, distracted driving, and driving while intoxicated.
Increased amounts of liability judgements & settlements
- People filing lawsuits more frequently, and increasingly high jury verdicts awards and settlements are significantly outpacing consumer inflation rates, thereby increasing risk to families.
- Annual legal advertising by the Plaintiff’s bar is on pace to exceed one billion dollars. These ads promote high-dollar settlements which, in turn, normalize higher damage awards, influence jurors, and heighten plaintiff expectations.
- Statistics indicate rising rates of personal excess/umbrella claims, as well as rising settlement amounts based on non-economic damages and psychological damages.
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