What to Expect
March 2021 Issue — Life in Order Special Section
By Terry L. Tadlock
Most of us are happy to bid last year farewell. 2020 will live in infamy for years to come, and will go down as the year that COVID-19 considerably changed our lives and the way we conduct business, if we have been able to conduct business at all. Well, the insurance industry is no different. We have not only felt affects of COVID-19, but we have also had the worst year in history of tropical storms and hurricanes. There were 30 named storms, of which 12 made landfall in the U.S.
Oh, there is more… We also experienced one of the worst years ever with wildfires in California and surrounding states. All of these natural disasters tremendously affects the insurance industry across America. It is no wonder this leads to the question I am asked now, more than any other time: “What is going to happen to insurance costs 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 “Hard” markets, 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 we will in 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 underpricing 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.
Terry L. Tadlock, CIC, CPCU, CRIS has been in the insurance business since 1979. He joined the Correll Insurance Group of agencies as the President of Correll Insurance Group of Hilton Head (CIGHH) and South East Coastal Underwriters (SECU). Prior to joining CIGHH/SECU Terry was the owner of a business consulting and education firm in Florida, specializing in coastal insurance for businesses, as well as designing one of the very first programs for insuring affluent coastal homeowners.