Hatoway's Insights

Insurance Rates on The Rise….part 2

As we wrote in last month’s Beacon, insurance rates are rising at unprecedented levels. Insurance carriers are trying to respond to market factors that have continued to put pressure on their financial stability. The things that are driving the insurance carrier reaction are hyperinflation on costs to repair or replace cars and buildings, claims frequency, and severe weather conditions that continue to plague the US. In our first editorial we addressed some of the details involved in hyperinflation. In this story I will address severe weather patterns and their effect on your insurance rates. 

Severe weather is on the rise. Many have ideas on why that is. I’m not here to discuss the reasons we are seeing more severe weather but to discuss what it means to our insurance rates. 

Severe weather along with hyperinflation has made a nasty soup for insurance rates. Insurance carriers use past annual averages in severe weather. The National Centers for Environmental Information is a governmental agency that reports on these events. In the past Insurance carriers planned for 8-9 weather and climate disasters that cost over $1 Billion. According to the National Centers of Environmental Information, the annual average for weather/climate disasters with losses exceeding $1 billion between 1980-2023 is 8.5 events. However, if you squeeze that timeline to just the last five years (2018-2023) the annual average balloons to 20.4 events. In 2023 the US saw twenty-eight separate billion-dollar weather and climate disasters that impacted the United States. Yes, you read that correctly TWENTY-EIGHT weather and climate disasters that impacted the United States. Seven of them, possibly eight, were in states in the Midwest.

View disaster map

A large number of events last year show the insurance carriers need to adjust, or our insurance carriers won’t be around to continue to pay claims. In the States of California and Florida, we are seeing these severe weather pressures playing out in scenarios that hurt policyholders. State Farm announced via a press release dated March 20, 2024, that they are going to non-renew 30,000 homeowners, rental dwelling, and other property insurance policies and non-renew 42,000 commercial apartment policies in California. This means that those policyholders will receive documentation stating they will no longer have insurance on their property when the policy expires. Those policyholders will need to look elsewhere for coverage. Due to the tough conditions for insurance companies in California, that will be a very difficult project for policyholders. 

Luckily, here in Indiana and Ohio we aren’t seeing large insurance carriers getting out. Small carriers are making that decision. Here in Indiana, we saw one carrier end the personal lines policy offerings. Secura Insurance Companies announced back in October that they were exiting the Personal Lines Insurance market in all their 13 states. Hopefully, the rate increases that we are experiencing will allow the insurance carriers to stay financially viable in the Midwest and keep competition for your premium dollars strong. Otherwise, we may see similar scenarios here in the Midwest where thousands of policyholders are left with expiring policies. 

Insurance companies use all the information they can to design a rate for their policies. A person’s credit score, address, date of birth, weather, building materials costs, and stock market conditions are just a small list of rating factors the insurance companies use in their rate strategy. The goal is to pay overhead expenses to run their insurance company and be able to pay their policyholders when claims happen profitably. Insurance companies are for-profit businesses that get rated for their financial stability. If they continue to post financial losses their financial stability rating from financial rating houses like AM Best gets downgraded. This can cause significant ramifications for the insurance carrier and their clients; Leading to some of the insurance carrier actions we discussed earlier. 

Matthew Hatoway 

Matthew is a second-generation agency owner. He and his family have been independent agents for over 30 years. Hatoway Insurance Partners, Inc. and Mansfield Insurance Agency continue to help thousands of clients with their insurance needs. 

Why Should I Consider a Business Umbrella Policy?

As a proud business owner, it’s your job to consider the “what-ifs” for your business. Of course, you don’t want to think about the worst… but no matter how careful or cautious you and your employees are, accidents do happen – and sometimes they can be serious.

If you experience a catastrophic accident, things can get costly… and fast. That’s where your ERIE agent and ERIE’s Business Umbrella Policy can help.

Why Do I Need a Business Umbrella Policy?

This specialized policy can kick in with extra financial protection against a legal judgment for a covered loss. Business umbrella liability offers a cushion above and beyond the limits of your commercial general liability, professional liability, business auto liability and employer’s liability insurance.

Business umbrella insurance could help you when facing a serious and costly claim, for example:

• One of your drivers causes a very serious accident and a suit is filed against your business.
• A fire starts at your owned location and damages several other buildings in the surrounding area. A suit is filed against your business for the resulting damage.
• Your business gets sued because a customer is injured by a product he or she purchased through your business.
• A competitor claims you made false or malicious statements about their business in public or in an advertisement and decides to take legal action.

A major claim, like those mentioned above, could threaten the very existence of your business. And if a claim is serious enough, it could even have the potential to put your own personal assets — like your home and your retirement account — at risk.

What Erie Insurance Offers

ERIE’s Business Umbrella coverage, called a Business Catastrophe Liability Policy, offers your business $1 million or more of extra protection above your primary Erie Insurance policy’s liability coverage for a covered loss.

ERIE’s business policies also give you access to a variety of resources including:

• Coverage for legal costs to defend a covered claim.
• Assistance from a risk control consultant who can recommend measures to help you identify, manage and reduce your business’s risks. (Learn more about our risk control services.)
• Access to online disaster planning and business continuity tools through the Institute for Business and Home Safety’s “Open for Business” program.

We can help you look ahead

Business umbrella insurance is probably more affordable than you think. Talk to your local ERIE agent about adding business umbrella insurance to your current business policy. He or she will talk to you about affordable options that can work for your business.

What to Know About Hail, Roof Damage and Hail Fraud

A hailstorm just blew in through your neighborhood. Suddenly, there are people at your door telling you they can repair your home’s damage quickly and easily. What would you do?

While some hail damage may be obvious, you can’t always trust that someone showing up to your door has your best interests in mind.

If you’ve recently battled a hailstorm, here is what you need to know about hail, roof damage, homeowners insurance and common scams.

What should I do after a hailstorm?

The size and density of a hailstone will determine the severity of damage you’ll find after a storm. While some hailstorms can cause severe damage to your car and home, others can leave little to no harm at all.

When the storm has passed and it’s safe to go outside, inspect any damage that may have occurred to your car or home. The Insurance Institute for Business & Home Safety (IBHS) recommends contacting your insurance agent immediately if you suspect hail damage. Your ERIE agent knows the ins and outs of your specific policy and can help you determine whether you should file a claim to help cover the cost of repairs.

To help your agent, be sure to record the date and timeframe the storm occurred and take photos that can help support your claim.

For more hail safety tips, read our guide on what to do before, during and after a hail storm.

Common signs of hail damage

You may spot hail damage in a few different places on your property including roof, siding, windows, outdoor furniture and vehicles. Damage can look different depending on the object.

Signs of hail damage to a car:

• Chipped or cracked windshield
• Dents on the roof or other areas of your vehicle
• Other dings or paint scratches

Signs of hail damage to a home:

• Dents in gutters or outside vents
• Chipped or cracked windows or skylights
• Damage appearing on one side of the roof
• “Bruises” or dark spots appear on shingles in a random pattern

While some damage can be easy to spot, you may not always be able to see the damage hail has done to your roof.

An insurance adjuster knows the difference between roof damage from hail versus regular wear and tear. A trained and trusted adjuster can diagnose any potential problems.

What is hail fraud?

Having to deal with weather damage is bad enough. Unfortunately, there can also be fraudulent roofing contractors that emerge after a storm, sometimes called “storm chasers.”

They often appear quickly after a storm and claim that your roof has been seriously damaged by wind and hail. Many “storm-chasing” contractors are transient, moving around the country following recent storm activity to increase their chance of landing a sale.

The IBHS and the National Insurance Crime Bureau (NICB) recently teamed up to offer this list of tips to spread awareness of roofing contractor fraud.

What are the signs of hail fraud?

Storm chasers may point out pre-existing damage, create their own damage, or say there is damage when there isn’t any. Here are some signs that you should think twice:

• “Free” inspection: Someone wise once said “nothing good in life is free.” While reputable contractors might offer free inspections with no strings attached, be cautious that some fraudsters might use this tactic to get on your roof and point out damage that isn’t there. Worse, some might create their own damage.
• They pressure you: Those in the con business often pressure you to make a quick decision during a difficult or stressful time. Give yourself space and time to contact your insurance agent and make the right decision.
• The contract has gaps: Your contract should be detailed and include an estimate on cost, work schedules, payment schedules, listed contractors and more.
• Upfront payment: While it’s reasonable for any contractor to ask for a down payment, fraudulent contractors often demand all or a large amount of the payment upfront. Sometimes, they’ll take your cash and dash after performing shoddy work— or no work at all. Trustworthy contractors will often organize a payment schedule that works best with your schedule.

If you do find damage to your roof or other areas after a storm, a trustworthy contractor will work with your insurance company to help fix the damage.

Hiring a contractor after a hailstorm

As you begin your search for a contractor, here are some tips:

• Get multiple estimates. Don’t rely on a single estimate as being the one with the best price—or the best work. Do some research and get estimates from three to four different contractors.
• Ask to see their license and proof of insurance. Make sure both are real and up to date.
• Ask for references. Has this contractor worked on similar projects? Do their references speak highly of them?
• Take the right steps. Hiring a contractor can be stressful, especially when you’ve discovered some recent damage from a storm. Read through our full checklist of tips to consider when hiring a contractor.

Does my homeowners insurance cover hail damage?

Hail damage to homes can total hundreds or thousands of dollars, depending on how long the storm lasts, the size of the hail and the amount of damage it causes.  Generally speaking, most homeowners insurance policies cover damage from hail and wind caused by storms. Coverage can vary, however. For example, manufacturing defects that existed prior to the storm might not be covered under a hail damage claim. Check with your insurance agent about the specifics of your policy.

Uncertainty is part of life, but that’s why you have insurance. Talk to an insurance professional like your local Erie Insurance agent. They can tell you more about the options ERIE offers and help you get you a free quote customized for your home.

Spring Cleaning for Business

Businesses need Spring Cleaning Too

As the temperature begins to warm up and the trees and flowers begin to bloom, we tend to feel a sense of leaving winter behind. Many of us Spring Clean our homes. In fact, 78% of Americans tackle Spring Cleaning in their homes according to a marketing research survey done by Ipsos in 2022. I know as a business owner I feel the same about my business. Winter brings a time of dull feeling and just getting through each day. Spring puts that “spring” back in my step. I’m excited again to get my business growing and thriving.

Here are a few things you can do as a business owner to refresh for the upcoming months.

1. Your marketing plan. Sometimes we put our marketing on autopilot, or you have a third-party helping you out. It’s time to get a meeting with them. Evaluate what is working and what isn’t. Look at new promotions, make updates to your website, or maybe start a new social media account to help grow your business. Gather your ideas, make a plan, and execute.

2. Your inbox. This one is a tough one for me. I currently have over 1000 emails flagged for follow up. Don’t worry these aren’t client service emails. There are things I wanted to read, or thought could help my business when evaluating customer service practices, client meetings, or overall business practices. Unfortunately, I never got to them. Some are over three years old. Take the time to clear out the unneeded messages. Make this easy and select as many as you can for a mass delete or archive. Seeing that big number drop can really provide a boost of accomplishment.

3. Equipment. Go through your equipment list. Determine where you need maintenance or potentially replacements. It helps to write these things down and update the list as you make changes. Many businesses rely on their equipment to make their product. Any downtime to a baker’s ovens can really hurt, for example. While you are taking inventory,get rid of the old printers and computer monitors that are sitting in the closet. If they have been in the closet for more than two months, chances are you won’t use them again. Don’t be a hoarder of office supplies.

4. Review your business insurance. Like our marketing we tend to let our insurance get stale. If we don’t use it, we just keep paying the bill. Set a meeting with your insurance agent. Here at Mansfield Insurance Agency we like to meet with our clients at least once a year. New equipment, new business practices, and even new social media accounts can be reasons to update coverage. There have been several advances in Cyber Security Insurance products. Property and Auto coverage continues to rise in premium because risk continues to increase for business owners.

Ultimately, as a business owner it pays to be intentional. Springtime is a great time to make a plan, commit to it, stay positive, and reap the rewards. You’ll look back as next winter arrives thankful that you made a plan.

Matthew Hatoway is a second-generation owner of Hatoway Insurance Partners and Mansfield Insurance Agency. Throughout Matt’s career he has made client relationships his main priority. He works with families and small businesses to protect the most important assets by listening, caring for his clients like family, and providing the best protection.

Insurance Rates on the rise…why?

by Matt Hatoway

We are in unprecedented times. We at Mansfield insurance agency think it’s time for unprecedented communication. This is going to be a long one, forgive me for that. However, I do think it will help to explain some of the things we are all dealing with in the last three years. We continue to see raising premiums (especially this year in home policies). The insurance industry has continued to have to adjust to unforeseen factors affecting their financial stability. The three main factors are hyperinflation, claims frequency, and severe weather patterns. I want to address the first one, hyperinflation,  in this editorial.

We are receiving information from our eight different insurance carriers it seems monthly. Many are changing their rates to adjust to what is happening. Some have gone further and adjusted how their policies are organized. Increasing minimum deductibles, changing new business eligibility, and in some cases how they are responding to wind/hail claims are all steps we are navigating. These increases and policy changes are not carrier specific. They are industry wide. I don’t know of a carrier that has not increased their premiums significantly in 2023. Most (if not all) plan to make similar increases again in 2024.

This insurance market is the most volatile in our agency history. In this editoriall I’m going to address hyperinflation. I will plan to write a series of pieces that address each of the major factors affecting the insurance industry.

Hyperinflation and Insurance

Insurance rates are designed by insurance companies based on what they think it will cost to make the policyholder whole at time of loss. This includes things like roof damage during a windstorm, cleanup after a water or fire loss, repairs to a home or auto, or replacing a vehicle after an accident. These repairs or replacements have increased dramatically. The overall cost to maintain and repair a vehicle is up 19.5% according to the Consumer Price Index. Replacing a vehicle has not been any better. The average price of a new car has risen 20%, while used cars have gone up an astounding 37%.

Building materials are a similar story. In 2022 building materials were up 4.7%, another increase that followed a 14.7% increase in 2021. These increases have all led to higher costs per claim for insurance carriers.

The numbers above are countrywide. To give you a more local look at these factors I’m offering a look at our agency numbers. In our agency alone we saw our cost per claim rise 35% this past year. Going from $7500 per claim to $10,100 per claim. The graphic below shows claims numbers from our system between 2020 – 2023. It’s a good illustration of the increases we have seen in just our communities.

View Claims Chart Here

I show you these numbers to illustrate that not only are we seeing factors throughout the country, but we are seeing them in our local communities as well. Again, we are in unprecedented times. We at Mansfield Insurance Agency want to be transparent about the issues our industry is facing. 

What can you do about it?

1. Maximize your discounts. The largest discounts insurance carriers offer is multi-policy discounts. The more policies you have with a carrier the more your discount. There are also other discounts that could be available in certain situations.

2. Credit. Most insurance carriers use a client’s credit a factor in your insurance premiums. They do this because statistically an individual with a lower credit score tends to have a higher loss ratio. Taking steps to improve your credit score can help lower your insurance premiums at renewal.

3. Roof Year. The age of your roof has become a very important factor in both coverage and rating. Some of you may have heard from us. We are reaching out to everyone to make sure we have the age of the roof correct. If you have updated your roof please contact us so we can make sure your roof age is correct on the policy and in our system.

4. Pay in Full. Many carriers provide discounts on annual premiums if they are paid in full.

5. Review Vehicle Usage. Again another rating factor that many don’t think about is their annual mileage and usage of their vehicle. Rate is based on risk. If you have vehicles that are not driven much annually or your commute has changed dramatically it may be beneficial to update the usage with your agent.

6. Modify Deductibles. Many remember having a $250 Homeowners Deductible. Those days are sadly over. However, your auto deductibles and homeowners deductibles is a lever you can use to lower premiums. Have a discussion with your agent on what changing your deductibles can do for your premiums.

7. Telematics. Many carriers provide programs that include technology that will track driving habits. This technology will provide drivers with specialized rating based on the driving data collected. Things like hard braking, fast acceleration, distracted driving (phone use while driving), speeding, time of day you drive, etc. are all measured. Discounts and added benefits are provided to those who achieve good driving scores.

8. Ask for us (or your agent/agency) to quote other carriers. The benefit of working with an agency like ours is you can get a view of the market in one place. As an independent agent we can provide an insurance policy from several different carriers ensuring you are receiving the best coverage at the best price. This option has changed drastically in the last few months as many carriers are adjusting their eligibility guidelines to limit new policies. Our staff will evaluate your specific situation and provide a market analysis showing what each of our carriers can provide.

9. Mitigate Losses. We are all in this together. The better we all maintenance our homes and pay better attention while driving the better all our insurance rates will become. Most claims are sudden and accidental but there are things you can do to try and lessen claim events. Trimming Trees that overhang the home or commercial property, cleaning out gutters, cleaning out your chimney flue annually, and check sump pump operation are all things that can help keep a claim from happening to your home.

In the next edition of The Beacon I will cover part two of this series: claims frequency. We will plan to continue to monitor all of our carriers and their unique decisions over the course of 2024. Ultimately, we want what is best for our clients. If you have any questions, please reach out to me or one of our agents at 812.637.2300.

We value our relationship with all of our clients and don’t take advantage of the trust put in us to be an advisor.

Home & Auto: What We Offer with Erie Insurance

At Hatoway Insurance Partners, we offer a comprehensive home and auto insurance bundle with Erie Insurance. Not only do you receive a multi policy discount, but we will also have you fully covered at the time of a loss. Below you will learn about the Erie Secure Home Plus bundle, and the added bonuses for your Erie Auto policy.

Hatoway Insurance Partners and Erie want to provide you with the right coverages that suits your home, lifestyle, and budget. Erie offers the Advantage, Plus, and Select bundle with your ErieSecure Home policy. Here are some details on the Plus bundle (our favorite):

• Sewer or Drain Backup
• Underground service line protection up to $10,000 (sewer, natural gas and propane pipes, and electrical lines)
• Siding and Roof Restoration
• Identity Recovery
• Increased limits for theft, lost or misplaced jewelry, silverware, and firearms
• Increased limits for trailers, watercraft, debris removal and business personal property if you have a home-based business

Erie Insurance’s auto policy offers features like rate lock, auto plus, new auto security, zero dollar glass deductible, and ride sharing coverage.
One of the endorsements we always like to add is Erie Auto Plus to any of our quotes or policies. This benefit only increases your auto policy premium $30 annually. Below is what Erie Auto Plus includes:

• Diminishing deductible
• Increased coverage limits: emergency travel costs, personal items, sound equipment, and non-owner trailers
• Increased transportation expense coverage
• Waived deductible when an Erie homeowners policy deductible applies
• Death benefit of $10,000 for you or a relative who dies due to bodily injury from an auto accident

We know this is a lot of information, and we are sure you have a lot of questions. Let our knowledge help you navigate the increased coverages with Erie’s home and auto bundle. Hatoway Insurance Partners wants to make sure that our clients are fully insured at the time of a loss. Feel free to call one of our agents at 317-861-4411 (New Palestine) or 317-462-7292 (Greenfield) to discuss your options!