Passing The Buck to Consumers: Insurance Update

Sands Anderson’s Brian Pitney recently interviewed independent insurance agent Chris Hall, owner of The Halls of Insurance about recent changes in the insurance industry.  They discussed increases in insurance premiums, disruptions in the insurance markets, and strategies in obtaining new insurance and reducing insurance costs.


I am seeing some of my clients struggle lately with significantly higher premiums for hazard and general liability insurance for commercial real estate. Some have trouble even obtaining basic coverage for standard owner-occupied buildings. What is going on in the insurance industry right now?

Hall: The insurance industry is the midst of the hardest market in the history of commercial insurance and personal lines. What this means is insurance companies err on the side of caution in feeling the pulse of the industry as it has become inundated with claims, high inflation costs, increased construction costs of 30%, and new auto parts costing almost double those in years past. As insurance companies say no or pause to new risk, this creates a flood of clients looking for alternatives. It results in a domino effect among companies as there are fewer options, and it creates an uncompetitive and unstable market. The few companies taking the risk become powerful, as they can charge higher premiums when clients have such limited opportunities elsewhere.


What strategies may my clients implement in decreasing their premiums or finding more options for competitive pricing?

Hall: First, the independent insurance agents have many more avenues to find competitive pricing.  If you contact an independent agent, he or she can search the market for you. That being said, look at all available discounts.  For older buildings, provide the agent with a list of updates to building, electrical, plumbing, HVAC, and the roof.  These are very important.  Security and sprinkler systems also provide a very positive impact on rate.  Second, start looking at pricing insurance rates as soon as you know you are going to purchase a building or business. The longer you wait, the more difficult it is to get good pricing as you handcuff the agent with time to research the policies available through a competitive company.


One of my client’s homeowner’s insurance premium almost doubled this year. The home is older (built in 1915) and my client has never made a claim. Is this a trend or just an outlier?

Hall: As homes get older, insurance companies feel the risk becomes greater for something to go wrong.  Older plumbing, roof, electrical and other systems increase their insurance risk.  The rate on a million-dollar home built in 1915 will be twice as much as a million-dollar home built in 2023.  Also, there are fewer companies wanting to write high valued homes built over 100 years ago. This also creates the chain reaction effect mentioned above with a shortage of companies wanting to write any home over 100 years old.  I’m not saying there are none willing to write the policies, but there are significantly less options than in 2022.


What about insurance for commercial vehicles and personal automobiles? Are you seeing similar issues with increasing premiums and less carriers willing to accept risk?

Hall: Commercial vehicles and personal autos are in the same boat. Car part pricing is almost double or triple that of four years ago. More and more vehicles with computers, cameras in bumpers, and sensors in doors and windshields drive up the cost of repairs. So, four years ago the average price of windshield repair was $230-$400. Today an average windshield on a 2021 or newer vehicle with sensors is about $1,200-$1,400 after calibration. If a windshield alone is $1,000 more to replace, you can imagine how other car parts have increased as well. The claims are costing double if not triple compared to four years ago, and insurance companies cannot just absorb that cost. They simply pass it along to the policy holder.


You have been in this business for about 25 years. Have you ever seen issues like these during your career, and do you have any predictions going forward?

Hall: In 25 years, I have never seen anything like 2023. I read an article not long ago asking whether people, businesses, and personal and real property in the United States will ever be uninsurable. It was an interesting article and posed a great question. When you have one of the largest insurance carriers in the country pulling out of Florida and California, that is not a good sign for the insurance industry as a whole.  Inflation, claims, and a volatile stock market directly impact the insurance industry. When all three of those things damage the surplus, the law requires insurance companies to purchase reinsurance at extremely high rates to ensure they can pay claims. Those costs, in turn, are also passed along to the policy holders. Most companies are running around a 108% combined loss ratio in 2023, which means they are paying out $108 to every $100 collected in premiums. Until that number reverses, rates will continue to rise.

Sands Anderson is ready to discuss the evolving insurance market and to assist with your commercial real estate legal needs. Contact Brian Pitney or a member of our Commercial Real Estate Team today.


Chris Hall

As owner of The Halls of Insurance, Chris represents a number of top-rated insurance companies and is committed to providing his clients with coverage for their individual and business needs at an affordable rate. He can be reached at