Car Insurance

Insurance buyers have been holding their breaths for more than two years waiting for the “insurance cycle” to change, signaling a return to higher insurance pricing, policy restrictions and cancellations. All indications point to the unfortunate reality that the change has occurred. Wholesaler-distributors in all parts of the country are reporting that, at best, prices have firmed, and, on average, property, general liability, commercial auto and workers compensation rates are being increased 15 percent to 20 percent.

“Long-tail business” such as product liability and workers compensation where claims payout does not occur until many years after the event that causes the loss, seem hardest hit. Wholesaler-distributors with some of the more difficult product liability exposures have been hit with rate increases of 100 percent and more.

While small and medium-sized corporate insurance buyers have benefited most from the insurance price cutting of the past several years, they are also likely to be the hardest hit when rates begin their upward spiral. The insurance industry, as a whole, never seems to price its product accurately. Over several decades, general price levels have either been excessive or inadequate.