As we continue through 2024, the personal insurance landscape has evolved, presenting both challenges and opportunities for individuals across various sectors. The impacts of natural disasters, regulatory changes, economic fluctuations and more continue to shape the marketplace. Continue reading to gain insight from the Brown & Brown Personal Lines team.

Market Overview

Personal insurance customers across all industry segments are grappling with the far-reaching effects of industry-wide challenges. In response to years of mounting losses, insurance providers are implementing drastic measures to restore profitability, leading to reduced capacity and higher rates and premiums. Even previously favorable risk profiles are now impacted by these widespread measures, making insurance more challenging to secure for almost everyone. This significant shift in the industry underscores the urgent need for customers, advisors and carriers to reassess protection strategies.

Geography no longer dictates catastrophic events, as evidenced by New England floods, Texas freezes and Midwest convective storms contributing significantly to losses. However, the most significant shifts in carrier capacity are observed in Florida, California and Texas. Beyond the events, natural disasters also directly affect the availability and costs of building materials, fuel and labor necessary to rebuild and repair damaged properties.

As climate change contributes to the increasing frequency and intensity of severe weather events, carriers will likely incorporate these factors into their pricing and underwriting strategies. This long-term trend may lead to ongoing premium increases and adjustments in coverage options.

We are starting to see a pivot back to a more growth-centric approach for many of our markets, both on the property side and auto. The corrective measures that the carriers have been taking over the past number of years are working, and loss ratios are subsiding as the rate is flowing through and underwriting corrections have been taken from a risk selection standpoint. The utilization of E&S certainly helps, as carriers get the freedom of rate and form in highly catastrophe-exposed areas. Severe storms continue to impact the overall loss trends for property, signaling we are not “out of the woods” quite yet, but we are getting there.

Homeowner Insurance

Severe convective storms significantly influence homeowners’ insurance rates across the country. The resulting increase in claim costs drives up premiums, especially in high-risk areas. Carriers adjust their policies and pricing in response to the financial impact of these storms, leading to higher premiums, stricter coverage limits and potential changes in policy availability. Homeowners may also be required to adopt risk mitigation measures and comply with updated building codes to manage insurance costs and improve their property’s resilience to severe weather events.

In 2024, the U.S. regulatory landscape for homeowners’ insurance is characterized by a tension between consumer protection and market stability. Homeowners are facing increased restrictions on coverage and availability, particularly in high-risk areas. State and federal regulations are crucial in shaping the insurance market, influencing everything from policy availability to pricing. As the market adapts to these regulatory pressures, homeowners must navigate a more complex insurance environment, balancing coverage needs with evolving regulatory requirements.

Many states have implemented or are considering regulations restricting homeowners’ coverage options, particularly in areas prone to natural disasters. Carriers are tightening their underwriting standards in regions vulnerable to frequent natural disasters, such as Florida, California and Texas. This can mean reduced coverage limits, higher deductibles or outright refusals to write new policies in high-risk zones.

Regulations often require homeowners to install risk mitigation measures, such as water detection systems or fire-resistant materials, as conditions for coverage. This aims to reduce the frequency and severity of claims but can impose additional costs on homeowners. Water damage from burst pipes, toilets, washing machines, dishwashers and other plumbed appliances has emerged as a significant driver of losses in the high-net-worth (HNW) market. Homeowners’ policies increasingly limit coverage for properties with a history of recurrent water damage.

To maintain coverage, homeowners may need to install water monitoring systems and automatic shutoff devices. Automatic shutoff valves can prevent extensive damage by stopping water flow when a leak is detected. Regular maintenance and inspections of plumbing systems can also help prevent potential failures.

Personal Insurance Team