Across the country, the insurance-buying public has seen sharp premium increases when their homeowners and automobile insurance policies are being renewed. In many cases, premiums are outpacing claims and expenses, as well as rising higher than inflation.
The rules
New Jersey requires carriers to provide notification, in the form of a conditional renewal notice, to policyholders of the premium amount as well as any changes to the policy.
Premium increases are common at renewal. These premium increases may be tied to loss history or a change in carrier appetite. These notices will be specific to individual policyholders and will provide some degree of specificity as to how much the individual premium will increase.
These notices will be distributed anywhere from 30 to 120 days before the premium will increase.
Help your clients understand
It helps to remind your clients that there are several factors that contribute to premium increases, including:
- claim frequency and severity
- inflation
- supply-chain disruptions
- shortage of good labor at a time of higher demand
- material cost issues, which result in claims not being closed in a timely manner
- construction cost increases
- climate change and extreme weather
Tools to use
PIA Northeast has a sample letter that you can use to notify your clients about premium price increases.
