Fall Insurance: Health, Home, Auto & Elections
BY: Brian O’Connell
The leaves may be falling, but insurance rates will rise in late 2024. And those aren’t the only issues impacting insurance consumers.
The autumn months bring unique challenges to insurance customers—think back-to-school, seasonal hurricanes, and wildfire issues in select states, along with potential big public policy changes coming out of the U.S. elections scheduled for November 5, 2024.
Even so, American insurance consumers should also expect more of the same in the fall of 2024. Policy rates will continue to rise, and policy options may be thinner in key areas like homeowners insurance an auto insurance as costs increase.
According to a Fitch Ratings report, many current insurance issues continue through the fall, especially policy rates, which will keep rising thanks to sustained inflationary trends.
“Whether consumers have insurance from work or via the individual marketplace, key issues include rising premiums and ever-increasing deductibles, which leaves individuals more exposed to unmanageable out-of-pocket costs,” says Chris Labrecque, Chief Customer Officer of Paytient, a health care benefits services firm in Orlando, Fla. “In health care, for example, high and unexpected costs drive insured Americans to defer care, which can lead to worse outcomes and higher costs down the road.”
Consequently, pricing and policy choices should override them into the end of 2024.
From back-to-school to presidential elections and a whole lot in between, here’s an inside look at the insurance industry issues that should resonate with consumers this fall.
Health Insurance
Healthcare cost trends are continuing to rise, and as a result, individuals’ responsibility to cover more out-of-pocket costs will continue to be a growing issue.
“Public policy in the future will address ways to increase individuals’ access to health care and focus on resources to address affordability,” says David Smith, senior director of strategic partnerships of Paytient. ‘Both presidential candidates and their parties will search for solutions to provide access to care at the right place, at the right time, for the right reasons.”
Another big issue is that policy costs are rising as inflation typically takes 18-24 months to affect health plan costs fully.
“This delay, known as the “inflation lag,” means that the current financial strain on healthcare will continue to worsen over time as the effects of inflation fully settle,” Labrecque says. “The rising cost of prescription drugs driven by Rx innovation and new therapies coming to market is another factor behind recent cost increases.”
For insurers, the biggest issue is improving the consumer’s engagement in their healthcare journey, particularly for those with undiagnosed or chronic conditions.
“The cost of healthcare services and medications has been increasing, leading to higher insurance premiums and out-of-pocket expenses for consumers,” Labrecque notes. “With rising out-of-pocket costs, consumers face the difficult choice between taking on a financial burden or deferring healthcare to save money. Solutions that help bridge the pre-deductible gap and give consumers the confidence to seek care are needed across the commercial insurance market.”
Travel Insurance
Even as the sun sets in the summer months, Americans still intend to travel through the fall of 2024, especially during the holiday weeks between Thanksgiving and Christmas.
“Travel insurance is at its highest demand season in many years,” says Andrew Jernigan, CEO of Insured Nomads. “More people are aware of geo-political tensions, hurricane season is predicted to be one of the strongest in years, flight cancelations and trip interruptions are up significantly, and health scares tied to pandemic all give rise to the real need for travel insurance.”
Policy-wise, not all travel insurance is equal, and travel consumers need to do their homework to get the best deals. “Check the medical benefit limits to ensure you get at least $250,000-500,000 in medical and evacuation coverage, and look for plans that include telemedicine and airport lounge access for when your flights are delayed,” Jernigan advises.
Travelers should also note that most airlines allow you to change your ticket with minimal fees.
“However, most hotels now have penalties if you cancel within 24 hours of your stay. Insurance can help here,” says Jason Weinberger, a 20-year weather industry veteran and vice president of Enterprise Sales at MyRadar, a leading worldwide weather app with over 50 million downloads across iOS and Android.
Weinberger cites Longwoods International’s tracking study of American travelers, which shows 94% of adults plan to travel in the next six months. “While there will always be cancellations, the issue is often a lack of capacity to accommodate canceled flights,” he says. “Insurance may give you the flexibility to not only cover your loss but allow you to make alternative arrangements.”
Homeowners Insurance
Weather threats like hurricanes, wildfires, and flooding top the main issues list on the homeowners’ insurance front this fall.
For example, in this year’s hurricane season, tropical events occur earlier than anticipated and at a greater intensity.
“Hurricane Beryl broke multiple records; it was the earliest Category 5 hurricane in the North Atlantic Basin, had the fastest intensification rate, and was the strongest hurricane in the past few months,” says Jason Weinberger, a 20-year weather industry veteran and vice president of Enterprise Sales at MyRadar, a leading worldwide weather app with over 50 million downloads across iOS and Android. “We’re not seeing increases in tornado activity, but we are seeing changes in the pattern and clustering of tornadic events. We’re also seeing more widespread wildfires and issues with flooding.”
Consumers should stay up-to-date on local weather issues, review their homeowners’ policies thoroughly, and work with their agents to protect their homes, vehicles, possessions, and loved ones against the proper perils in their area. They should also note homeowner insurance policies are rising, with consumers paying 6% more on average in 2024. Furthermore, between 2021 and 2023, U.S. households paid 19.8% more for homeowners insurance, with costs rising from $1,984 to $2,377 on an annual basis.
In that environment, negotiating or renegotiating homeowner policy rates and raising deductibles is okay, but don’t cut corners too much.
“With inflation and changes in various building codes, policyholders should ensure that their policy has sufficient coverage to rebuild or purchase a similar structure or item if they suffer a catastrophic loss,” Weinberger advises.
Other industry experts see big changes coming to the insurance sector, and some of those changes are already underway.
“The home insurance market is getting tighter,” says Brian Boyd, an agent and broker at Cover My Risk in New York, N.Y. “With insurers not getting the rate they need in certain markets; they continue to cease taking on new risk. Some areas are being non-renewed as insurers exit the market in high-risk areas.”
Climate change is having an impact on global weather and, thus insurance rates, too. “The intensity and frequency of storms are causing billions of dollars of damage, and homeowner premiums are not keeping up with those claims costs,” Boyd says. “I am seeing more non-admitted policies created to replace those non-renewed admitted policies.”
Auto Insurance
Skyrocketing costs are the paramount issue in the auto insurance sector, and that scenario isn’t changing anytime soon.
Other key factors facing consumers this autumn is the continued high cost of labor and parts linked to auto repairs, which the insurance industry passes on to its policyholders. Additionally, as the legal industry gets more involved in the auto accident claims industry, accident settlement claim payouts are skyrocketing, which also fuels car insurance costs.
One issue working in drivers’ favor is a decrease in policy claims.
“For the auto insurance sector, this yo-yo of insurance losses and surpluses continues from one quarter to the next,” Boyd says. “After the pandemic, when auto ownership increased dramatically, we saw that auto claims dramatically increased. But now those losses seem to be decreasing. This could be good news for drivers in months to come as perhaps carriers might lower rates a few percentage points.”
Back to School
Chelsea Ryckis, founder and president of Ethos Benefits in Orlando, Fla., says that as students return to school this fall, several insurance factors come into play.
Health Insurance: Ensuring that children and college students have adequate health coverage is vital. “This includes understanding the options under family plans, student health insurance provided by colleges, or Medicaid for eligible students,” Ryckis says. “Coverage for mental health services is also increasingly important.”
Auto Insurance: As students—many of which may be inexperienced, new or distracted drivers—head back for their next academic year, there’s an increased likelihood of both auto accidents and auto insurance claims.
“As a result, insurers may alter their auto insurance rates to reflect the increased risk, particularly for policies covering younger drivers,” Weinberger says.
Back-to-school season may also mean updating auto insurance policies for families with teen drivers. “Parents should review their coverage to ensure it meets state requirements and provides adequate protection for young drivers,” Ryckis advises.
Travel Insurance: College students studying abroad or traveling during breaks may need travel insurance to cover unexpected medical emergencies, trip cancellations, or other travel-related issues.
Ryckis also urges parents to ensure their school-age children are up to date on vaccinations. “That includes flu and COVID-19 vaccines,” she says. We also encourage open conversations about mental health, provide access to counseling services, and promote stress management techniques.”
Safety on campus should also be a back-to-school insurance priority. “Remind students about personal safety measures, such as staying in well-lit areas, using campus security services, and knowing emergency contacts,” Ryckis says.
The Presidential Election and Its Impact on the Insurance Industry
By and large, insurance consumers should focus more on state and local election races rather than the presidential showdown between Donald Trump and Kamala Harris.
“With insurance commissioners controlling each state’s rules, the Trump/Harris outcome will not have a direct impact,” Boyd says. “The bottom line is insurers need premiums to pay claims. As long as claims continue to rise, so will premiums.”
It’s also worth noting that U.S. Presidents cannot control insurance industry policy unless legislation changes this from a state-level system to a federal system. “The National Association of Insurance Commissioners already meet, share ideas, and set standards for their states. Regardless of the election outcome, the bottom line is the insurance company’s solvency as each state backs its insurers to some degree.
Still, there’s no question that politics influences insurance policy decisions. “Last year we saw a few Florida carriers go insolvent after major hurricanes,” Boyd notes. “Insurance commissioners are elected in some states and appointed in others, so voters need to pay specific attention to their local/state politicians when it comes to insurance matters.”
The next president influences some macro-public policy factors.
“The outcome of a presidential or congressional election can significantly impact insurance consumers due to potential shifts in policy direction, regulatory oversight, and funding for healthcare programs,” says Chelsea Ryckis, founder and president of Ethos Benefits in Orlando, Fla.
Here’s how Ryckis views the election outcome and its impact on the insurance sector.
If Trump wins: “We could expect policies that favor deregulation, possibly rolling back parts of the Affordable Care Act (ACA) and encouraging more market-driven solutions,” she says. “This might lead to increased options for consumers but could also result in fewer protections, especially for those with pre-existing conditions.”
If Harris wins: “Policies may likely focus on expanding access to healthcare, reinforcing and possibly expanding the ACA, and enhancing consumer protections,” Ryckis adds. “This could mean more government involvement in healthcare and potential efforts to create a public option.”
