Property Insurance Changes for 2023

Mother nature made herself known in 2022. From hail to wildfires, last year was an unprecedented claim season for insurance companies in the state of Nebraska. These claims, combined with continued inflation, have forced the hands of insurance companies across the state to take a hard look at the rates, deductibles, and coverages they offer on property insurance policies.

The result of this could impact a number of different criteria that make up your property insurance premium for 2023:

• Reinsurance – Most insurance companies “re-insure” their exposures with a reinsurance company each year (think of this as an insurance company for your insurance company). Reinsurance is used when the total claim volume owed to insureds within a given year exceeds a certain amount. Due to the large number and increased cost of claims over the last few years, insurance companies have had to tap into their reinsurance more and more. This causes a domino effect – the reinsurance carrier increases their insurance rates for the insurance companies, which in turn have to increase insurance rates for their individual insureds.
• Building values – Inflation continues to drive up the cost of buildings and materials. In most years, building values automatically increase on your policy by 2-4% as an inflation guard. Most insurance companies are now increasing them by 10-15% to get buildings to the correct values based on the market.
• Deductibles – Because of Nebraska’s recent claim history and increased building values, many insurance companies are implementing mandatory wind/hail deductibles. This could be a percentage deductible based on the insured value of your home or building or a flat deductible increase.
• Rate changes – Due to all the reasons outlined above, property premiums for your home, commercial, or farm buildings will inevitably increase in 2023.

Every property insurance company in the state of Nebraska will be impacted by the factors outlined above. Know that not all insurance companies take rate increases at the same time each year. Be mindful of this if you are questioning whether your current insurance company is the best fit for you – just because another company is less expensive today, doesn’t mean they will continue to be.

As a property owner, you should get educated on the coverages and deductibles listed on your property policy. Are the building values enough to replace the building in the event of a total loss? Does your property have Replacement Cost or Actual Cash Value? Would you be able to pay your deductible out of pocket?

At First State Insurance Agency, we work hard to make sure our customers have the right coverage to protect them from unforeseen events. Our agents would be happy to review your current policy to make sure it is still the best fit for you!