A couple of weeks ago, I had lunch with Eric Dunning, Nebraska’s Director of Insurance, to discuss the state of the insurance industry in Nebraska. We discussed some of the current challenges, as well as some constituent questions that might be coming regarding the increase in property and casualty insurance rates and any “non-renewal” notices due to perceived risks of certain clients.

It is important to distinguish the various types of insurance: property and casualty, life, health, etc. Many insurers and reinsurers operate across several states. Major storms in the southern part of the United States, fires in Hawaii, and even wildfires across Nebraska have increased the number of property and casualty insurance claims nationwide. In addition to the higher-than-normal losses, replacement costs for buildings and equipment have risen dramatically due to the current labor shortages and high levels of inflation and high interest rates have all negatively impacted the major insurers. This has resulted in significant premium increases (in some cases 200% or more) and non-renewals of some insureds.

Let me be clear, I have no ties to the insurance industry from a financial standpoint but make it a point to understand how businesses work, particularly as Vice Chair of the Legislature’s Banking, Commerce, and Insurance Committee.

Although I have yet to hear directly from constituents, I have visited with several insurance agents who are working hard to keep their clients insured and trying to help them understand the reasons for the rate increases. Many see clients walking out the door to go to another agent only to find out that they are not able to get better coverage elsewhere either. Although this will not last forever, it is safe to say that we will be dealing with this situation for the foreseeable future.

One way you can reduce the effect of this environment on you is by being smart about your insurance claims. Property and casualty insurance is meant to be there when disaster strikes, not for every small incident that may arise. As an example, if you back into a garage door that you were certain was open and create $1,500 in damage to your car, you may want to not file a claim with the insurer if you have a $1,000 deductible just to receive the $500 check. Processing the claim alone will cost the insurer over $1,000. Over time, these types of claims result in higher rates for you, and can even lead to your policy being canceled altogether.

In times when resources are limited, it is not unusual for insurers to review the past three years’ claims activities when evaluating who is the kind of risk that they want to take. Historically, there has usually been an alternative for individuals and companies that become uninsurable, but this can never be guaranteed. I will continue to monitor the current environment to make sure that this issue does not have a huge negative impact on the residents of District 42.

I look forward to continuing to hear from you regarding issues that are important to you. It is a privilege to serve as your State Senator, and I will continue to give my full effort to make a positive difference for the District and the State. You can reach me at mjacobson@leg.ne.gov or by calling my legislative office at 402-471-2729.