Op/Ed: NH Insurance Dept. can help you navigate the challenges posed by ‘hard market’

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When it comes to insurance, consumers typically focus on the monthly premiums they pay, but oftentimes many of us will neglect to read our policies until we really need them. It’s natural that we don’t want to consider the unpleasant things in life, like illness or accidents, until they occur.

The New Hampshire Insurance Department serves as a valuable resource for Granite Staters seeking clarity on the coverages of their policies. Additionally, we work proactively to identify critical market trends and help consumers understand their impact.

Consumers are understandably confused and frustrated over rising homeowners and auto insurance premiums, especially despite lacking a claims history or undergoing significant life changes to justify the increases.

These rising costs are the result of challenging conditions affecting the insurance industry, leading to what is known as a “hard market,” characterized by escalating rates and limited coverage options. During a hard market, insurance companies become more selective about the risks they are willing to cover, and consumers may find it more challenging and expensive to obtain insurance.

Hard markets are cyclical, and typically follow “soft markets,” where conditions are more favorable for buyers with lower premiums and more relaxed underwriting standards. Both “hard” and “soft” markets reflect a basic supply versus demand dynamic.

Various factors, such as inflation, high interest rates, global supply chain disruptions, litigation costs, and natural disasters all contribute to the complex market conditions. Inflation has a widespread impact on repair costs and shortages on parts and materials, resulting in increased expenses for insurers. As these market pressures materialize, insurance companies adjust rates to ensure financial stability, solvency, and the ability to fulfill claims.

While market corrections are an inherent part of economic cycles, imposing burdensome regulatory measures can prolong or even worsen the challenging conditions. As regulators, insurance departments should seek to do no harm to our competitive markets – and ultimately to consumers.

The good news is that despite the repercussions of severe weather events and industry upheavals, New Hampshire has maintained a competitive insurance market, underpinned by a favorable regulatory environment and a commitment to the free-market system. Our insurance market provides consumers with a wide array of insurance choices, and remains robust and resilient.

At the New Hampshire Insurance Department, we encourage consumers to take the following steps to successfully navigate the challenges posed by the hard market:

  • Engage with your insurance agent regularly to explore cost-saving measures, such as discounts, adjusting deductibles, and modifying your driving habits.
  • Compare insurance coverages to identify the most favorable value and options. New Hampshire has hundreds of auto and homeowners insurance carriers competing and offering coverages to consumers. Shop your current coverages around.
  • Enhance property resilience by upgrading to disaster-resistant building materials and leverage smart home safety devices to proactively mitigate potential damage.
  • Consider essential coverages like automatic inflation guard, ordinance and law, and extended replacement cost for enhanced financial protection.

Despite the market fluctuations, the New Hampshire Insurance Department remains dedicated to serving the state’s residents. Consumers can access valuable insurance resources and guidance on our website by visiting http://insurance.nh.gov. For inquiries or complaints regarding your insurance coverage, contact us at 603-271-2261.

DJ Bettencourt is Commissioner of the New Hampshire Insurance Department