Why Insurance Premiums Are Rising and What You Can Do About It

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What this video's about

In this special edition of The Market Share, Paul Gifford, Chief Investment Officer at 1st Source Bank, sits down with David Miller, a licensed representative with 1st Source Insurance Agency. The two discuss how inflation and rising costs are reshaping the insurance market.

If your premiums have gone up, your deductible has changed, or your policy suddenly looks different, you're not imagining it. In this conversation, we explain what's behind those shifts and how to stay protected.

What's driving higher insurance costs

David calls this a hard market, meaning the industry is tightening. Carriers are raising rates, narrowing coverage, and being more selective about what they insure. Several key factors are pushing this trend:

• More frequent and severe weather events
• Higher home values and rebuilding costs
• Slower repairs and increased material expenses

These conditions have pushed claim costs higher across the board. That's why many homeowners are seeing changes in their premiums and coverage.

What insurers are doing and how it affects you

While we work with over 15 insurance carriers, David notes that many are making similar adjustments in response to rising costs:

• Roof coverage is changing. Some carriers reduce coverage based on roof age or only pay depreciated value. Others may refuse to cover older roofs entirely.
• Storm deductibles are increasing. Storm damage is being treated differently than fire loss. For example, a 1 percent deductible on a $300,000 home means $3,000 out of pocket.
• Underwriting standards are tightening. Carriers now ask for more documentation and are quicker to limit or exclude certain risks.
• Some companies are leaving the market. In regions with high losses, a few carriers have chosen to exit entirely.

These changes can be confusing or frustrating, especially when they show up in a renewal notice with little explanation. But there are steps you can take to stay in control.

How we help you stay protected

As an independent agency, 1st Source can shop across multiple carriers to help you find the best option for your needs and budget. Flexibility is especially important in today's market.

We also prioritize expertise. More than half of our agents are actively pursuing professional certifications beyond state requirements. This helps us provide you with clear, informed advice, not just quotes.

David shares one story that illustrates the value of getting it right. A client was referred through our mortgage team for a $60,000 loan. Instead of insuring just the loan amount, we assessed the full replacement cost of the home and insured it for more than $240,000. Six months later, a fire destroyed the house. Because the policy was based on actual replacement value, the client was able to rebuild.

What you can do now

David offers a few simple but important steps you can take:

1. Open your insurance mail and email. These messages may include important changes to your policy that affect your coverage and out-of-pocket costs.
2. Talk to your agent. If you haven't reviewed your policy recently, now is a good time. Even if you've done it before, things may have changed.
3. Ask questions. A quick conversation can help you understand what's covered, what's changed, and what you may need to update.

Paul adds that even he had overlooked his own policy details until recently. When he finally checked, he discovered his roof coverage had changed significantly. That kind of detail matters, especially in a market like this one.

Conclusion

Insurance policies are changing, and those changes can affect you when you least expect it. At 1st Source, our job is to help you understand your coverage, stay ahead of industry shifts, and protect what matters most.

Have questions? We're here to help with honest advice and practical options that work for you. Click here to learn more.

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Insurance products and annuities are not insured by the FDIC or any other government agency; are not deposits or obligations of, or guaranteed by 1st Source Bank; and may involve investment risk, including loss of value. 1st Source Insurance, Inc. is a wholly owned affiliate of 1st Source Bank.