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Market Update/ Rate Changes / Material Misrep Abuse

Updated: Jan 11, 2023

The New Year is providing new opportunities for insurance agents as consumers seek to save on their insurance premiums and in many other areas of their budgets. November data, however, shows a concerning trend as consumers grapple with rising cost, "Rising consumer debts colliding with rising interest rates is a ticking time bomb. Over the last several months, consumer debt has climbed at a steep, steady pace as Americans struggle with rising prices. November was no different, with consumers piling on another $27.9 billion in debt," as noted by MarketWatch.

Further noted, "The Federal Reserve consumer debt figures include credit card debt, student loans, and auto loans, but do not factor in mortgage debt. When you include mortgages, US consumers are buried under more than $16.5 trillion in debt."

Insurance consumers need guidance from Independent Agents more than ever before as they receive their increased renewal premium and are unsure if additional savings are available via other carriers. Compounding rate increases in both auto and homeowners are difficult for consumers to absorb. Texas insurance carriers and MGAs continued to increase rates over the past 45 days as bodily injury has a larger percentage of attorney repped claims at their initial reporting. Further, the dramatic inflation related to physical damage, while softening, continues to impact results.

The following programs took additional rate based on ITC and SERFF filings:

· American Access +9%

· Hallmark +30%

· Mercury +6.8%

· Liberty Mutual +12%

· Root +19.6%

· American Family Connect +12.3%

· Clearcover +10%

· Crestbrook +11.7%

· Economy +15%

· Lonestar Maverick +10%

· Aspen +5%

· Unknown amounts from several county mutuals MGAs, including: Gateway Fenix,

AutoMGA, AmWins, and Excel

Agents have the opportunity to use resources such as telematics (usage based) offerings to help offset increases. Alinsco provides a phone app which monitors and reviews driving habits and can save insureds as much as 30% after the first month. Our team is available to review these cost saving options with you.

Last week I had a day to see some agents in the Rio Grande Valley. I hope to be back soon to see more of you. It was a good first week of the year listening and learning from agents. Hundreds of agents have found Alinsco to be a solid go-to even in this inflated environment. Our thanks.

Texas 88th legislative session will begin this month and Alinsco will be monitoring bills and weighing their harm or benefits to agents and carriers. We had a very successful 87th session and were able to limit new legislation which could have brought harm to agents and consumers. As consumers are paying more, it is an important session to watch as consumer groups may not understand the underlying consequences of their bills and increase insurance rates further.

In the past we have called upon our agency partners to assist us in reaching out to our representatives about certain bills and if we see something of serious concern we will contact you.

In my meetings last week I had a number of agents share stories of how some programs are using Material Misrepresentation to deny claims. Every example I heard was a misuse for a claim denial. I encourage you to investigate any use of material misrepresentation with your clients and report abuse to The Texas Department of Insurance. The use of material misrepresentation would be rare, but there is a rash of use lately. In 2008 the Texas Department of Insurance made clear their position on the improper use of MR for denial.

I remain available to you at any time. Please text me if you have additional thoughts.

Thanks for choosing Alinsco,

Don Owens

CEO Alinsco Insurance


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