Navigating the Maze of Personal Lines Insurance: What Homeowners and Drivers in Northern Nevada Need to Know

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Hey there, homeowners of northern Nevada! It’s Jeremy from Ochsner Insurance. I hope you’re enjoying your Saturday. Lately, I’ve noticed a lot of confusion swirling around personal lines insurance, particularly regarding home and auto coverage. Let’s dive into what’s happening and what you can do about it.

Have you noticed increases in your insurance premiums? Maybe you’ve even faced non-renewals or struggled with the renewal process itself. You’re not alone. Many folks are experiencing the same frustrations. But why?

Picture this: Normally, there are five lanes of traffic representing insurance carriers offering homeowners insurance. But right now, it feels more like we’re down to just one lane. Carriers are tightening their belts, imposing restrictions, and minimums on policies, and requiring more in-depth underwriting processes. It’s a tough situation for both independent and captive agents, alike.  There are even some carriers who are restricting current limits on prospects- meaning if you have limits below their minimum; can’t write their insurance! 

So, why the squeeze? Well, insurance companies need to make a profit to stay afloat to pay claims. Unfortunately, many are facing a deficit, with claims outweighing premiums.  Many carriers on the property (homeowners) and personal auto are running deficits, when comparing premium collected to losses paid for claims. What does one do with a deficit (not government, but a person managing their budget)?  One must cut costs and/or increase revenue!  With carriers not being able to get their rate through; they’ve left the state!  By them leaving the state, the capacity to sell insurance decreases! 

Now, let’s talk about the factors contributing to this imbalance. Inflation is causing reconstruction costs for homes to skyrocket.  The cost of labor and materials have shot up with inflation.  Have you seen the cost of eggs or a gallon of milk recently?  Inflation is real, unfortunately.  I know gas is subtracted from the inflation calculation, but gas is still over $4 per gallon in No. Nevada!

Reinsurance costs are also on the rise, prompting carriers to pass those expenses onto policyholders, if they can get rates increased to cover their costs.   Reinsurance is insurance for insurance companies.  With returns for investors in banks of 6-7%, why would an investor put their money towards reinsurance?  There’s risk in reinsurance and arguably zero risk having money in an interesting bearing account in a bank. 

Lastly, Nevada’s legislature has passed AB 398, which now prohibits defense costs within the limits of a policy.  This will undoubtedly drive-up insurance premiums, because defense inside the limits policies are less expensive.  Who wins in this scenario? Also, NRS 690B.024 allows attorney’s access(with some requirements) to insurance policy limits, prior to litigation taking place.

 But what does all this mean for you as a homeowner? Well, brace yourself for the possibility of higher premiums or even limited options for coverage. And if standard carriers continue to pull out, you might find yourself turning to excess and surplus providers, which come with hefty price tags.  Do you want a CA Fair Plan in NV?  Beware, rumor has it Nevada is next.   Click for more information on Fair Plans.

And if you’re wondering how you can help, consider reaching out to your state legislator. Advocating for insurance reform could make a big difference in stabilizing the market.  Say No to a Nevada Fair Plan!

Insurance for an auto crash. What should I do?

When it comes to auto insurance, things aren’t much better. With legal representation becoming more common and the rising cost of cars, premiums are climbing higher. If you find yourself in an accident, protect yourself by documenting everything with photos and videos.   Once you’re safe from the incident, take out your phone and take photos of the damage to the other vehicles and document the number of people in the other vehicles!

In a nutshell, the personal lines insurance landscape in northern Nevada is facing some serious challenges. But by staying informed and advocating for change, we can work together to find solutions. Reach out to your representative, stay vigilant on the road, and remember to document any incidents.

I hope this sheds some light on the current state of personal lines insurance in our area. Remember, knowledge is power. Stay safe and take care!

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