What Causes Insurance Rate Changes?

April 11, 2022 By Jordan Draper

A Message from Agency President & Founder Nathan Dagley

As we look back on the events of the last couple of years, we could all agree that we have experienced unprecedented events that most of us never imagined we would experience. For many of us the change to working at home, remote schooling for our children, or even being able to buy basic necessities like toilet paper was challenging and stressful and became the “new normal” for a while.

Though things are slowly returning to normal, we are facing new challenges as a result of the events of the last couple of years. Rising insurance costs are one of those challenges. I first established Dagley Insurance in 2001 after beginning my career in 1998 and have seen a lot of disaster events including huge events like Tropical Storm Allison and Hurricane Harvey just to name a couple. Massive storms and Wildfires have caused serious disruptions in certain States but what we are seeing now across the entire country is unprecedented in my career.

As consumers, we have experienced increasing costs in so many areas of our daily lives- gasoline, homes, groceries- to name a few. One of the driving factors to these increases is supply chain issues as a result of the pandemic. You may be wondering how supply chain issues would affect insurance rates- especially if you haven’t had a claim.

There are various factors that determine the cost of insurance. Poor planning by insurance carriers, monetary inflation, construction cost, power grid failures, record number of claims, and carrier diversity are some of the primary factors influencing current insurance rates- aside from your personal claims history and risk factors. These unprecedented rate increases are a culmination of these factors and we wanted to take the opportunity to give you a little more information on each of these so you may better understand the reasoning behind these record increases.

Carrier Planning: Insurance carriers must maintain a good financial rating to stay in business, and therefore must balance their financial status-cash reserves to pay claims vs risks they assume. We know that carriers must increase their rates to match monetary inflation and rebuilding costs. Typically, this would result in 2-3% increases each year; however, with the introduction of rising costs for the materials used to build vehicles, houses etc., we are seeing rates increase hit double digits across the country.

Monetary Inflation: For some time, the United States has increased its money supply, devaluing the money you have. In 2022, it is possible we will see double digit inflation, resulting in your money being worth less.

Construction Cost: Inflation is a driving force for the increase in construction costs, but supply chain issues for materials and labor shortages are also contributing to increased costs. When homes cost more to build, insurance companies are on the hook for paying more to rebuild a home in the event of a claim. The result is an increased amount of insurance needed (Dwelling Amount) and thus increased rates.

Claims: Claims have been on the rise as well in the last couple of years. According to the Texas Department of Insurance, carriers paid approximately 5.7 billion dollars in claims in 2020 and over 10.4 billion dollars in claims in 2021 (2). This increase is multifactorial, though serious weather events like hurricanes, and even winter storms contribute to the increase in claims. On a national level, reports show that underwriting losses in the third quarter of 2021 drove the worst quarterly net income (for carriers) since 2011 (1). Additionally, there was a 5.6 billion dollar net underwriting loss in the first nine months of 2021 compared to a 0.4 billion net underwriting gain in 2020 (1). As mentioned above, insurance carriers strive to maintain financial balance, and these losses have made it necessary for them to increase their income to overcome the significant losses.

So, what are we, Dagley Insurance, doing to combat these rate increases? Rest assured, we are doing everything possible to provide you, our clients, with the most competitive rates in this difficult market. We are continually getting appointed with new carriers to make sure we have the best selection of carriers with the most competitive rates to meet the needs of our clients. We are also providing reviews, as requested, to our clients who have received a renewal with a significant increase in hopes of finding a way to combat the increase. Though we have a large selection of competitive carriers, we find that it is sometimes best to stay put for the time being. In many cases, finding a lower rate is not possible at this time due to the aforementioned circumstances, and it may be better to “wait it out” until the “storm” passes. In some cases, we are able to find a more competitive rate and better fit for our customers. Either way, we pride ourselves on making sure our customers are taken care of and rest assured that you are no exception.

We are grateful you have entrusted us as your insurance broker and we strive to exceed your expectations by providing the best customer service and being your advocate in a time of need. WE REPRESENT YOU, the insured, and will do everything we can to help you save money and have the correct insurance for your needs.

Sources:

Spector, Neil., Gordon, Robert. “Property and Casualty Insurance Results: Nine Months 2021”. https://www.verisk.com/siteassets/media/downloads/insurance-results-report-9-months-2021.pdf
Texas Department of Insurance. “Annual Legislative Report on Market Conditions. 2021. https://www.tdi.texas.gov/reports/pc/documents/pcalr2021.pdf

Editor: Caitlin Ogletree

Confusion about Texas Homeowner Claims After Sept 1st, 2017

August 30, 2017 By Jamey Smith

There has been and continues to be incorrect information relating to insureds’ rights and obligations under their current policies and reporting of claims. Here is a response from the Independent Insurance Agents of Texas Association:

Setting the Record Straight on Claims Filing Misinformation

There has been and continues to be incorrect information relating to your insureds’ rights and obligations under their current policies and reporting of claims. If these posts were intended to alarm and confuse the public, then those involved have achieved their goal.

The Facts

The normal claims process has not changed.
Consumers continue to have a full-range of remedies in the event an insurer acts fraudulently or in bad faith.
Lawsuit-abuse legislation (HB 1774) applies to lawsuits filed after September 1, 2017.
The Texas Department of Insurance will, as always, in catastrophic events, be monitoring the activities of insurance companies to make sure that claims are being paid properly and promptly.
Texas has the strongest consumer protections in the nation against insurers that unfairly deny or delay claims.

As your insurance agent, we represent you! If you need to file a claim, please check our Harvey Resource Guide.

Flood Claims Do’s and Don’ts

August 30, 2017 By Jamey Smith

Dagley Insurance has been communicating closely with our major flood provider, Assurant Flood Insurance. If you haven’t started a claim, please be sure to call the claims line 800-423-4403, option 4

Do’s and Don’ts from Assurant Flood Insurance:

Do Take lots of photos/videos of everything, the more the better
- For wall damage, you need to take a ruler or tape measure to show how high up the wall the water was, take a picture, from there you can cut out 2-3 inches above the line and remove and discard the sheet rock
- For flooring damage, you need to keep a 4×4 piece of each room (padding included), everything else can be discarded
- For contents, you need to take photos and provide as good of a description as you can (brand, year purchased, purchase price, serial number, etc.), you MUST keep the items and not get rid of them
Don’t wait for the adjuster to start repairing the property. Properly document via the steps above and start drying out affected area. You want to minimize the damage as much as possible and prevent possible mold growth.
Don’t wait to file a claim. Get in the adjuster queue right away.

We hope this information helps expedite repairs and your claim. Please understand that due to the catastrophic nature of this storm, this is a slower than normal process. We are working hard to keep you updated and well informed through the process.

Thank you for your trust in our agency.

Run, Roy, Run!

September 16, 2016 By Dagley Insurance

Run, Roy, Run!

It just takes one event, one meeting, or one grocery store trip to meet a person or hear a story that will impact your life. Roy Ponder, in our DFW office, and his wife Chris were attending an information meeting for a network group in Dallas one night back in 2009. They were all socializing, meeting new people and telling stories when one mom told her story that changed their life as they know it. Mo shared with them about her son Griffin’s fight with the “bad guys.” Bad guys to Griffin but called Leukemia to all of us.

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Don’t be the DD!….

July 13, 2016 By Dagley Insurance

DON’T BE THE DD!….Distracted Driver that is.

Mentally making your grocery list in your head for the week, texting your best friend back real quick or looking at that weird bumper sticker on that car next to you…I think we all have been guilty of getting distracted while driving once or even daily. When you hear “distracted driving” its easy to think that means just totally taking your hands off the wheel and your mind somewhere else. But in reality, if your attention isn’t 100% focused on the road in front of you, you are driving distracted. Surely, holding an apple in one hand while the other is on the wheel isn’t all that distracting…right? Think again.

There are 3 ways you can be driving distracted:

Visually – Taking your eyes off the road.
Manual – Taking 1 or both hands off the wheel.
Cognitive – Moving your focus from the road to somewhere else.

Reading a funny billboard? Reaching in the back seat to grab something? Making 4^th of July plans in your head? You’re driving distracted. There is one major distraction that actually involves all 3 keys above…texting. [Read more…]

The expanding Dagley Insurance Family

December 18, 2015 By Dagley Insurance

The past year has been busy for the Dagley Insurance team! We are growing in every aspect and department, literally! It is such an exciting time for us here as we watch our “work family” grow in our Accounting Department, Commercial Department, Service Center and adding an Internet Sales division as well! Take a quick look at the newest Dagley members who have joined us in 2015 and now 2016…

[Read more…]

Thanksgiving By The Numbers

November 16, 2015 By Dagley Insurance

Ever feel like your family is the only one who stresses about traveling for the Thanksgiving Holiday? Or that someway somehow there will be some sort of chaotic drama? Let’s take a look at the ‘Thanksgiving Numbers’ so you can see how your fellow Americans spends their Thanksgivings as well.

[Read more…]

Trick-Or-Treat Safety Tips

October 22, 2015 By Dagley Insurance

Full moons. Black cats. Sugar rushes. Things get scary on Halloween. But what are the real dangers of the holiday? Learn how simple precautions, like carrying glow sticks and being extra vigilant about using crosswalks (kids are more likely to be struck by a car on Halloween than any other day of the year), can help you avoid the hazards and still have fun with your family.

Click the link below to learn how you can take steps to safety:

Staying Safe On The Spookiest Day Of The Year

Tips for Poison Prevention Awareness

March 9, 2015 By

March is Poison Awareness Month, and there is no better time to educate and explain the dangers of poisons. From household cleaners and gardening products to prescriptive medications and laundry soaps, teaching your family right from wrong can help keep everyone safe.

Know Who’s at Risk

Accidental poisonings occur every day to humans of all ages. Seniors are at risk because many of them attempt to take their prescriptive medications without the assistance of their reading glasses. While hoping to take a pill for high blood pressure, they could mistakenly ingest pain medication from a recent surgery. Infants and children are also in danger when it comes to poisons. Since their curiosity is at heightened levels at this stage in their small lives, they are more prone to touching, tasting and using their hands to explore.

Keep Items Out of Reach

Whether you’re storing household cleaners, paint, anti-freeze or prescriptive medications, you want to store the items properly. Brightly colored pills, floor cleaners, and laundry pods can look aesthetically pleasing, especially to children. A locked storage cabinet can keep prying hands and eyes safe. You also never want to leave pill bottles or containers unhinged and opened. In addition to a locked cabinet, you should store the items on an upper shelf in case the container is accidentally left open.

Read Labels

If you must have certain toxic items around your home, you need to read the labels carefully. This will allow its proper usage and what to do in case of an emergency. With so much attention being spent on being kind to Mother Nature today, you may also find products that are environmentally, human, and pet safe.

Implement an Emergency Plan

With over 700,000 visits to the emergency room each year and an estimated 35,000 deaths due to poisoning, you need to have a plan in place in case of an emergency. The Poison Helpline can be reached at 1-800-222-1222. Nurses, physicians, and other staff are in attendance at all hours and can offer their assistance.
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Tips for Controlling Your Caffeine Intake

March 2, 2015 By

Caffeine has become a part of our culture. Unfortunately, it has also been shown to cause health problems when consumed in excess. Most people today consume some amount of caffeine on a daily basis either intentionally or unintentionally. Several tips will help you to control your caffeine intake.

Know Exactly What You Are Eating and Drinking

Caffeine can be found in many foods, beverages and medications. It is commonly added to vitamin supplements and weight loss products. You should start by finding out exactly how much caffeine is in what you are eating and drinking. If the amount is not listed on the products, then you can usually find an exact answer online. Start to limit or avoid high-caffeine foods entirely.

Find Caffeine-Free Alternatives

Some people end up consuming caffeinated beverages and foods because of the taste. This is especially true for things like sugary sodas. You should start finding caffeine-free alternatives. Many products are available like caffeine free sodas, sparkling fruit juices, and other items that taste good without introducing a large amount of caffeine into your body.

Eat a Healthy Diet

Eat a balanced and healthy diet in order to reduce your cravings for caffeine. Some people are used to getting a boost during the day from a soda or cup of coffee. If you have balanced meals and snacks during the day that include proteins, complex carbohydrates, and fruits or vegetables, then your body is going to have long-lasting energy naturally. This will make it easy to avoid caffeine.

Get Enough Rest Each Day

There are individuals who rely on caffeine as a way to fight fatigue and exhaustion. This is not healthy and can cause problems with your body. You can break your reliance on caffeine by getting enough rest each day. Relax at the end of the day, go to bed at a reasonable hour and get between six and eight hours of sleep a night in a comfortable and quiet place. You will wake up feeling energetic and refreshed.
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