2020 Inflatable Insurance Update: Rate Increases and Lack of Availability
The inflatable insurance market, just like any other financial market, is always fluctuating. A variety of factors affect the availability of insurance coverage and the cost of insurance premiums. From 2013-2016 the insurance industry was seeing all time low rates, high availability and flexible insurance contracts. However, around 2017 the market began to fluctuate into what is called a “Hard Market”.
What Causes Insurance Costs to Increase?
Rising Claims Means Climbing Prices
With low rates and high availability from 2013-2016, more insurance policies were being written. More policies, in turn, means more claims. As claims begin to rise, more money is paid out to insurance claims. The insurance companies have to raise their premiums across the board in order to offset the amount of money that they have lost. The companies that don’t raise premiums end up pulling out of the market. With less options available the insurance companies that are left are able to raise their rates even more.
In hard market conditions, underwriters often adhere to stricter standards in an attempt to correct any adverse loss ratios developed during soft market conditions. As a result, insurance rates often go up, the amount of limit carriers are willing to provide decreases, and the number of players in the market restricts.Insurance Business Magazine
What this means for your Inflatable Rental Insurance
Wait Times may be Very Long
Wait times for getting an insurance quote are going to be extended. Make sure that you get your application and required documents in as early as possible, at least 30 days before your insurance is set to expire.
- Get your inventory list up to date and be sure that you have every piece of equipment listed.
- Have copies of your required documentation ready. This includes photos of safety signage, copies of your rental agreements and or waivers, a W9 and copies of your safety rules.
Be Prepared for More Underwriting Questions
Guidelines are much tighter in 2020. The insurance company underwriters are doing performance & profitability on every account. They are being a lot more selective about who and what they will cover.
Be Aware that Higher Limits may be Hard to Find
When the market is hard, the insurance companies are not willing to put up as much money for a claim. This means that they don’t like to give out policies with limits as high as they may have been during a soft market. If you have higher limits than $1,000,000 make sure you discuss market availability with your agent. Is that market still going to be available & at what price?
Premiums are going to be Higher
If you are bidding on jobs make sure you take into consideration increased insurance premiums and potential lack of markets for higher limits that were affordable in the past.
Property Insurance & Commercial Auto Insurance Rates will be Higher
“What is a Hard Insurance Market?”. Insurance Business Insider. https://www.insurancebusinessmag.com/us/guides/what-is-a-hard-insurance-market-180382.aspx . Written by: Bethan Moorcraft. October 11, 2019.
“What to expect with pricing and availability in 2020”. Larry Cossio. https://www.facebook.com/CossioInsurance/videos/166152504824512/?t=0. February 10, 2020.