Isn't That Rich Podcast

The insurance industry is in a unique and challenging place right now. With natural disasters, rising costs, and changing consumer habits, understanding the current market can be difficult. That’s why we sat down with Nathan Ashby, an insurance veteran with over 20 years of experience, to discuss the current state of the insurance world. As a representative of FSB Insurance, Nathan offered invaluable insights into what’s happening in the industry and how consumers can better protect themselves.

The Journey into Insurance

Nathan’s journey into the insurance world is a familiar one. He didn’t set out to become an insurance agent but found himself drawn to the field after taking an insurance course in college. From there, a chance meeting at a country club led to a career that has spanned over two decades. Starting as an independent agent, Nathan has witnessed firsthand the ups and downs of the industry, ultimately landing at FSB Insurance.

The Hard Market: What It Means for You

Currently, the insurance market is experiencing what’s known as a “hard market.” Nathan explained that insurance is based on the concept of spreading the risk among many to pay for the losses of a few. However, in today’s environment, the losses of a few have become the losses of many, creating significant strain on the industry. This has led to increased scrutiny from insurance carriers, who are now more selective about the business they take on and the prices they set.

A hard market is characterized by reduced availability of coverage, higher premiums, and stricter underwriting standards. According to Nathan, this is the hardest market he’s seen in his 20 years in the industry, driven by a combination of natural disasters, rising repair costs, and inflation.

Understanding the Impact of Inflation on Insurance

One of the key drivers of the current hard market is inflation. The cost of building materials, car parts, and labor has skyrocketed in recent years, making it much more expensive for insurance companies to cover claims. Nathan highlighted that many homeowners might not realize their current policies may be underinsured due to these rising costs. If your home insurance was set up several years ago, it’s likely that the replacement cost today would be much higher, potentially leaving you with inadequate coverage in the event of a disaster.

Nathan emphasized the importance of regularly reviewing your insurance policies, especially in light of inflation. “Ninety-five percent of homeowners are probably underinsured,” he warned, stressing the need to adjust your coverage to ensure you’re adequately protected.

Natural Disasters and Their Effect on Insurance

Natural disasters have been occurring more frequently and with greater intensity, contributing to the hard market. Whether it’s hurricanes on the coasts, windstorms in the Midwest, or wildfires in the West, these events have placed a significant burden on insurance carriers. Nathan pointed out that even regional carriers in the Midwest, like those in Illinois and Indiana, have been severely impacted. Some carriers have even stopped taking on new home or auto policies in certain states due to the high volume of claims.

For example, a carrier that FSB Insurance works with announced a halt on new policies in Illinois and Iowa for several months, eventually pulling out of Iowa altogether. This kind of drastic action underscores the challenges insurers face and the importance of working closely with your agent to ensure continuous coverage.

Why Your Relationship with Your Insurance Agent Matters

Given the complexity of today’s insurance landscape, Nathan underscored the importance of building a strong relationship with your insurance agent. Many people make the mistake of waiting until the last minute to secure insurance, often without fully understanding what they need. This can lead to gaps in coverage or policies that don’t fully protect your assets.

Nathan recommended starting the insurance process early, especially when making significant purchases like a home or car. An agent who knows your situation can provide tailored advice and ensure that you’re not just meeting legal requirements but also protecting your financial future.

Managing Rising Insurance Costs

With insurance premiums on the rise, many consumers are looking for ways to cut costs. Nathan offered a few strategies, such as increasing deductibles or reducing coverage on older vehicles that may no longer need comprehensive or collision coverage. However, he cautioned against cutting corners, particularly when it comes to liability coverage, which is crucial in protecting your assets in case of a lawsuit.

Nathan also noted that while younger generations are more inclined to shop for insurance online, they may miss out on the personalized advice and comprehensive coverage options that come from working with an agent. An agent can help identify potential gaps in coverage and ensure that you’re not just buying the minimum required by law, but rather a policy that truly meets your needs.

Life Insurance in the Current Market

While many aspects of the insurance market are in flux, Nathan mentioned that life insurance has remained relatively stable. However, he stressed the importance of regularly reviewing your life insurance policies, especially during significant life changes like marriage, the birth of a child, or buying a home. Your life insurance needs can change over time, and it’s essential to ensure that your policy provides adequate coverage for your current situation.

One critical aspect of life insurance that Nathan highlighted is the importance of updating beneficiaries. Life changes such as divorce or the death of a beneficiary should prompt an immediate review of your policy to ensure that it reflects your current wishes.

Final Thoughts: Stay Educated and Proactive

Nathan’s final piece of advice for consumers is simple: educate yourself. Understand what you’re buying, who you’re buying it from, and ensure that you’re working with a trusted advisor who has your best interests at heart. The current insurance market is challenging, but with the right guidance and a proactive approach, you can navigate it successfully.

As the insurance landscape continues to evolve, staying informed and maintaining a close relationship with your agent is more important than ever. Whether you’re reviewing your homeowners policy, shopping for auto insurance, or updating your life insurance, taking the time to ensure you’re adequately covered can make all the difference in protecting your financial future.

Connect with Nathan Ashby

If you have questions about your insurance or want to ensure that your coverage is up to date, Nathan Ashby is available to help. You can reach him at FSB Insurance in Harrisburg at 618-253-7165 or by email at [email protected].