Now is the time of year when the calls and emails start rolling in: “How much should we budget for our insurance next year?” Those are often accompanied by, “When will we get our renewal proposal?” Well, since fortune telling is not covered by most insurance agents’ errors and omissions insurance, we really can’t tell you. No seriously, we honestly don’t know.

As we have been explaining (to anyone who would listen), we are in a hardened insurance market with no end in sight. Many carriers are leaving the market completely, and those that are staying are constantly revising their underwriting guidelines. Because of this, renewal proposals are often received very late. I’ve received some renewals literally the day prior to the effective date.

So what do we do? First – take a deep, cleansing breath.

With regard to the budget – increase it. To determine how much, ask these questions:
• Are you located in a wildfire hazard area?
• Do you have a claims-filled loss history?
• Is your community more than 25 years old?

If your answer to all three questions is no, I would say budget a 15-20% increase for your insurance premiums. If you answered yes to one or more, your increase could be even more substantial. I can’t even begin to guess how substantial (for reasons why, please see the fortune-telling exclusion mentioned above).

With regard to getting your renewal proposal in a timely manner, please understand that your agent or broker is also waiting. We cannot create your proposal until we get the information from the carrier, and believe me AS SOON as we get that information, we are generating the proposal for you. I am certain I am not the only insurance professional who has been putting together a renewal proposal at 11 pm.

Time for another cleansing breath, perhaps? I just took one. It helps.

Terri Guest, CIRMS, CMCA, EBP, is the Senior Sales & Marketing Representative for Berg Insurance Agency in Northern California and may be reached at terri@berginsurance.com