Dec 08, 2022

Current Insurance Conditions Client Update

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    We are facing an unpredicted time of difficulty in the insurance industry. Consumers across the board are facing challenges, particularly with their home and auto policies.  

    We at Morris & Garritano are keeping abreast of the situation and taking strides to provide our clients with proactive, informative communication while we advocate for market stability. 


    Economic challenges leading to increasing rates 

    Increasing property rates, wildfire surcharges, non-renewals, and other restrictions have become prevalent in California’s homeowner insurance market. But now, continual supply chain issues and current inflation rates are causing disruptions to the auto insurance market as well.  

    Cars are getting more expensive to repair. Increased costs for replacement parts and labor combined with an increased number of auto accidents and liability claims have strained the insurance industry. Carriers are paying more to cover claims causing rates and premiums to rise. 


    California carriers are contracting  

    These costly conditions are causing many carriers to impose tighter restrictions on homeowner’s and auto policies such as requiring extensive documentation or mandating large down or full payments.  

    Some carriers are ceasing to write policies in California altogether, leaving clients with non-renewals.  

    CA is seeing an increase of risk with a decreased level of carriers and underwriters willing to share the burden. This is placing a lot of pressure on the industry causing hard market conditions to be worse than usual. 


    Advocating for legislative reform 

    At M&G, we’re working through solutions to provide stability for clients by communicating with our carrier partners and advocating for legislative reform to find long-term relief and market stability. Until the CA Department of Insurance acts on carriers’ requests for rate adjustments, we will continue to be impacted by these restrictions for the foreseeable future.    

    It’s likely that CA drivers will see their auto rates increase in the coming year in response to these market difficulties.  Homeowner’s coverage continues to be problematic with the looming threat of wildfires. 


    We are in this together 

    As consumers ourselves, we at Morris & Garritano have felt the frustrations that this fragile marketplace brings.  Alas, as insurance brokers, we also understand that for insurance companies to remain able to pay claims, they must collect the appropriate premiums.    

    Insurance has a long, predictable history of going through hard and soft market cycles.  We remain hopeful that homeowner and auto insurance markets in California will reemerge as competitive marketplaces in the coming years.   

    In the meantime, our Personal Lines Team is dedicated to assisting our clients with the best guidance and solutions possible.  We will strive to keep you apprised of the changing landscape of personal insurance. 

    We are in this together.  


    Frequently Asked Questions  

    Q: Why am I being non-renewed?  I live a mile from a brush area! 

    A: Insurers have expanded the area that they consider a wildfire risk.  Embers can travel as far as two miles when driven by dry winds.  It’s also possible that your particular insurer has too much exposure in a given community and they must reduce the risk of several large claims coming from the same area. 


    Q: My insurance renewal increased by 30%-50% this year, what can be done? 

    A: Your account manager will review all rating factors, coverages and credits to see if a portion of the rate increase can be offset. For maximum premium credits, it is highly recommended that you attempt to “bundle” your home, auto, umbrella, etc., if you do not already do so.  Higher deductibles can also have an impact on rates. 


    Q: I am already receiving all available credits, carry a high deductible, and my premiums are still high, can you rewrite my coverage to a different insurer? 

    A: While a rewrite to a new carrier may be possible, it is not necessarily recommended at this time. As insurers are likely to continue evaluating their active policies and guidelines, it is our belief that tenure with your current carrier will be beneficial. 


    Q:  Can I reduce the limit to rebuild my house to bring costs down? 

    A: Not likely. Insurers calculate this limit (“dwelling” coverage) using a replacement cost matrix that considers the specific details of your home. Due to increased building costs and inflation, many of our insurers have re-evaluated these limits in the last year and have amended policies accordingly.  Still, it is worth discussing this topic with your account manager to be sure this limit is appropriate. 


    Q: What steps can I take to mitigate a potential loss from wildfire? 

    A: Visit the CA Department of Insurance website’s “Safer From” page that details several ways to help protect your home from wildfires: Safer from Wildfires ( Be sure to take a video or photographic inventory of all belongings in your home and store the information offsite. This type of documentation will be extremely valuable in a loss scenario. 

    What "covered" should feel like.

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