Hometown Insurance Edmond

PSA to all my friends:

After 25, (yes 😳 25 years) in the insurance biz, I feel compelled to share some things that may help some of my friends with what I see daily as "insurance shock and awe". It is rampant, not just here in OK, but honestly in all 15 or so states in which we are writing. Here are some tidbits of info that may help you to: a) understand what is happening (and why) and b) figure out how to make this manageable from a financial/exposure standpoint.

First off, the issue is not on the auto side, it is on the HOMEOWNERS side. Every insurance company in OK loses money consistently, year after year on the homeowners side. This is a well known fact. However, in all my 25 years, I have never seen a shift like the one that has occurred during the past 6-12 months. Here are some significant changes and what they mean for you.

1) at least 6 carriers have exited the state of OK altogether (some through receivership, which is akin to BK);
2) of the ones who stayed here, the average per household increase here in OK from 2022 to 2023 is around 40%;
3) almost ALL carriers are increasing their wind/hail deductibles and almost all have implemented a "percentage (%)" wind/hail deductible. This is not a percentage of your claim, this is a percentage of your DWELLING limit. AKA a $500K home with a 2% wind/hail deductible means $10K out of your pocket on any storm driven loss;
4) there ARE significant ways you can save! There ARE ways you can purchase a policy to meet your needs while still being able to afford the premium.

Here are some facts that may be useful for you to know/understand this market shift, mainly to gain some perspective:

1) Travelers has implemented a MINIMUM 3% wind/hail deductible here in OK;
2) Safeco has implemented a MINIMUM 2% wind/hail deductible
3) Foremost will NO LONGER write any landlord policies through any agents here in OK. Cornerstone has taken the exact same stance as well.
4) Foremost is cancelling ALL Farmers agent written homeowners policies in OK (these are VERY tough to place right now as most other carriers are not even writing them)
5) Mercury and Safeco will barely write homes, most have implemented a "pre-bind pause" which means you will have to provide a litany of information and wait 15 days before they will even consider offering you a quote
6) State Farm has all but pulled out of CA, I foresee something similar happening here in OK at some point (although I am not a SF agent, I do follow financial trends so I am allowed to make my own predictions). If nothing else, I could see them slashing exposure mainly in the metro areas. Rural area policies should be fine.
7) Farmers has a similar situation going on as they have completely pulled out of Florida altogether and historically, OK is equally as unprofitable as Florida. I predict the same as #6 with them.
8. Hanover/Encompass will ONLY consider writing a homeowners policy IF they have a bundled auto package (profitability on the auto side is the only way in which they are staying in business here)
9) Progressive will consider writing your policy but in about 50% of the cases I see, they are requiring a FULL home inspection to be done, at your expense, in order to consider writing your policy.
10) I believe Liberty Mutual has all but pulled out of OK, the policies I have seen left here are priced considerably out of the market.
11) Most carriers will not even consider writing a homeowners policy with more than 2 claims, especially if they are the same cause, such as water or fire. These are pretty much impossible to write.

My point here is this. 1) Insurance companies are not "getting rich" as most people like to say, 2) Insurance companies do NOT want to write homeowners business here in OK as it is a VERY unprofitable business in which to engage, 3) The days of a "free roof" or even a significant portion of your roof being paid to replace every few years are long behind us 4) This is just the tip of the iceberg. 2023 was the most unprofitable year on record to date so those numbers will impact 2025 premium rates once the statisticians get to work.

I am definitely NOT trying to be the bearer of bad news here but I am hoping to educate people so that they don't think it is "just them" or "why when they have never filed a claim" etc etc. I feel like 99% of the people I talk to have very little understanding of the backbone of this business, which is understandable. This is what I live in daily so I understand it wholeheartedly. There ARE ways in which to minimize your exposure and balance that with your premium cost but you really need to be with an experienced agent who has been in this business through many of these cycles and truly understands the entire nature of it. An experienced agent can help you to not only understand the "why". They also need to be proactive for not just this year, but next year as well.

There ARE things you can do to impact your insurability and there are things that you can do to make yourself more desirable from an insurance carrier's perspective. My staff and I try to educate ourselves regularly on the comings and goings of the current (and upcoming) market so that WE can be the best help to YOU, not just peddle a product. I don't know much about much, but I have been in this business through 6 full underwriting cycles, so I know the ins and outs of this business like the back of my hand. Call me if you want straight talk, straight answers and some real strategies you can implement to make this situation more bearable for you and your family.

Thanks for joining my TED talk, friends.