Navigating Home Inflation: What You Need to Know

In today’s rapidly evolving market, understanding the changes in home construction and insurance costs is crucial. Here are some key points:

Skilled Labor Shortage: The building industry is currently experiencing a significant shortfall in skilled labor, impacting construction timelines and costs.

Rising Material Costs: Essential building materials have seen a sharp increase in prices, particularly since the COVID-19 pandemic. This includes items like asphalt shingles, concrete blocks, and drywall.

Home Value Surge: With a low housing inventory and high demand, the median price of homes in the U.S. has seen a dramatic increase over the past few years.

🛡️ As your trusted insurance agency, we’re here to guide you through these changes. Remember, updating your insurance policy could be crucial to ensure adequate coverage in this shifting landscape.


💡 Tip: Ask us about potential policy discounts to help manage your premiums.

👉 Call (209) 532-5102 or visit https://caldwell-insurance.com/ to learn more and explore your options

Navigating the Changing Landscape of Auto Insurance Costs

 

🚗 Navigating the Changing Landscape of Auto Insurance Costs

Attention drivers! In the current market, several factors are impacting auto insurance rates:

Repair Costs Surge: The price of car parts is climbing, making repairs more expensive.

Technician Shortage: Fewer repair professionals = longer waits and higher costs.

Medical Costs on the Rise: Even with fewer accidents, medical claims are costlier.

Car Shortages: With fewer new and used cars available, their value (and insurable cost) is increasing.

 

We understand these changes can be challenging. That’s why we’re committed to helping you find the best coverage at the best price. Ask us about policy discounts that could ease the pressure of premium increases.

Stay informed, stay covered, and drive with confidence! 🚘

 

👉 Call (209) 532-5102 or visit https://caldwell-insurance.com/ to learn more and explore your options.

 

Understanding Cyber Threats: A Guide for Businesses

Whether you own a business large or small, have no employees, or have several employees, you are a target for cybercriminals.

What you should be asking yourself is: do you use emails in the course of your business operation or make any payments electronically? If the answer is yes, then you are a primary target and have more exposure than you may realize.

Check out the excerpt below from a recent article on Cyber Threats and give us a call at (209) 532-5102, or visit our website at www.caldwell-insurance.com/contact-us to discuss options for protecting your business from a cyber threat. A Cyber Liability quote is just a call or email away.

In the digital age, cyber threats have become as common as they are complex. As pointed out by a Nationwide leader, “Cyber needs to be a part of the standard risks an agent talks about.” This statement underscores the critical importance of cyber threats in the contemporary risk landscape. Below are insights derived from recent findings and expert opinions, combined with personal reflections on the matter.

The Universality of Cyber Threats

No business is too small or too large to evade the radar of cybercriminals. If your operations involve emailing or electronic payments, your risk exposure is significant. Cyber threats don’t discriminate based on the size of your business or the number of employees. They are pervasive and ever-evolving, making it crucial for businesses to stay informed and protected.

Key Cyber Threats to Be Mindful Of

  1. Increased Prevalence of Cyberattacks: A recent Nationwide study indicated that 55% of respondents are concerned about the rise in cyberattacks. This statistic is a clear indication that cyber threats are a growing concern for businesses and individuals alike.
  2. Email Compromise: Falling victim to a compromised email can lead to significant information breaches. Fraudsters can silently lurk in your communications, interacting with your contacts and accessing confidential data.
  3. Ransomware: This type of attack is particularly concerning because it’s not the beginning but rather a significant progression of an attack. By the time ransomware is detected, the attackers have likely already stolen data and compromised various aspects of the network.
  4. Third-party Supply Chain Vulnerabilities: As businesses become more interconnected, the threat extends beyond individual companies to the entire supply chain. A breach in one company can have ripple effects, impacting all associated businesses.
  5. Identity Theft and Account Takeovers: These issues remain consistent threats, especially on personal lines. They represent a direct attack on an individual’s financial and personal information, leading to significant losses.

Cyber threats are a stark reality of modern business operations. Regardless of your business’s size or nature, it’s imperative to understand and prepare for these risks.

At Caldwell Insurance, we are committed to helping you navigate these complex challenges. A Cyber Liability quote is just a call or email away. Don’t wait for an attack to happen; proactive measures are your best defense against the ever-present danger of cyber threats.

Remember, awareness and preparedness are key. Stay informed about the latest cyber threats and safeguard your business with appropriate measures and insurance options. Let’s work together to ensure that your business is resilient against the cyber challenges of today and tomorrow.

Give us a call at (209) 532-5102 or visit our website at www.caldwell-insurance.com/contact-us to discuss how we can help protect your business from these pervasive cyber threats.


For a more in-depth exploration of cyber security threats and to gain further insights from industry leaders, we highly encourage reading the informative piece, “Cyber needs to be a part of the standard risks an agent talks about” – Nationwide leader, featured on Insurance Business America. This article provides a comprehensive look into the evolving landscape of cyber threats and how they impact businesses of all sizes. Dive into the article to enhance your understanding and stay ahead of your cybersecurity measures.

A Conversation with Caldwell Insurance: Accuracy of Risk Assessment by Insurance Companies (Sonora, CA)

Overall, would you say that the amount of risk assessed to our community by the insurance is accurate?

I would say that there are certain parts of our county, and in certain areas of our county that the risk is pretty accurate. Then there are other parts of our county where you mentioned earlier, Tuolumne County has done a great job securing the funds to reduce fuels in the area.

Unfortunately, that’s a new thing. It hasn’t been going on for years and years. So, I think we have to get ahead of the curve on that.

But to answer your question, yeah, there are certain areas that are reflective of a very high risk. But, what’s happened and where we’re kind of fighting with, and I spend sometimes hours right on the phone with underwriters trying to advocate for our clients and customers that the space behind them is cleared. You know? There is a fire break there, so I think there can be an improvement in the brush mapping.

Another big game changer, too, is these insurance companies are looking out 2000 feet and sometimes up to a mile from the property that they’re insuring, whereas a couple of years ago, they were only looking out 100, 200 feet. Yeah, so that’s changed too.

Tune in for Part 13 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Property Improvements to Attract Private Insurance!

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.

A Conversation with Caldwell Insurance: Recap of Reinsurance Market + Politics and Higher Reinsurance Costs (Sonora, CA)

The reinsurance market is very interesting in that there’s only a handful of them out there. It’s a global market. A lot of it is domiciled over in Europe and London over there. And so what they’ll do is back these insurance companies.

So, they’ll back Nationwide, State Farm, and Allstate after they’ve hit this threshold. And what they’ve said is, Hey, we know that there’s a great potential for these catastrophic losses, so we’re going to jack up our reinsurance costs, okay? That kind of goes downhill to the insurance company that we deal with.

Going back to Prop 103. Prop 103, in the legislation, specifically has language in there that says the insurance company, so State Farm, Allstate, AAA, whomever you want to name, even though they may be incurring the higher reinsurance cost, can’t pass that along to the consumer. So they have to eat that. So that, too, has been going on in the background, and that’s also pushed them out of the market to step back.

That’s interesting. So it’s politics, too.

It’s politics. And these other factors that the end consumer is not going to be aware of at all, are kind of playing together to increase the overall cost.

Tune in for Part 12 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Accuracy of Risk Assessment by Insurance Companies!

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.

A Conversation with Caldwell Insurance: Impact of Rate Regulation on Insurance Companies + Reinsurance Market and its Impact on Rates (Sonora, CA)

Wow.

So, it sounds like the solution is to allow insurance companies to increase their rates more because that would still be less than what people are faced with on the Fair Plan. But they’re only able to increase by 6.9% every year. What if they just did that every year? 6.9% in four years, and you’d have roughly what you’d need.

One of the interesting things was, for many years, the insurance companies weren’t taking rate and rates were kind of flat. And we can probably point our fingers at some insurance companies or say, gosh, part of the blame is to lie on them because they weren’t taking enough small increment rates over the years. Then we have all this inflationary pressure, and then in Tuolumne County, we have the brush fire that’s impacting us. And then you have this issue of rate that was going on in the background.

So, what has happened is a lot of these companies have filed for these larger rates, and the insurance commissioner, it’s a political position, has kind of said, no, we don’t think you need that rate to try to protect the consumer. So then the insurance companies are saying, okay, well, if you don’t want to give me my 20-30%, we’re going to step out of the marketplace. And then, once again, it’s created everyone having to go to this California Fair Plan, which is not a good alternative, as we all know.

Now, there’s a piece in this background that I’m not sure if you know much information about or have heard, and there’s usually not much talk about it, but there’s this reinsurance market out there.

I was going to ask you about that. Can you tell me what is the reinsurance market?

Sure.

So, the reinsurance market plays a big impact on rates and what we see on the consumer side when it comes to premiums. An insurance company on a catastrophic loss will insure or cover up to a certain amount. And I’m just going to use an arbitrary number. Let’s say they cover up to the first $50 million of losses. So, in the event of a large catastrophic fire where they’re paying out hundreds of millions or getting into the billions, that insurance company is only going to take on the first 50 million. Then, beyond that, it’s being taken care of by the reinsurance market.

The reinsurance market is very interesting in that there’s only a handful of them out there. It’s a global market. A lot of it is domiciled over in Europe and London over there. And so what they’ll do is back these insurance companies.

So, they’ll back Nationwide, State Farm, and Allstate after they’ve hit this threshold. And so what they’ve said is, Hey, we know that there’s a great potential for these catastrophic losses, so we’re going to jack up our reinsurance costs, okay?

That kind of goes downhill to the insurance company that we deal with.

Tune in for Part 11 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Reinsurance Market + Politics and Higher Reinsurance Costs.

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.

A Conversation with Caldwell Insurance: Insurance Industry in California Compared to Other States (Sonora, CA)

How does California, and the fact that they’re pulling out of California …. where are they going? How does California compare to other states? Because we’re not the only state that has catastrophic wildfires. We’re not Florida. They have flooding, they have hurricanes. The South has hurricanes. You’ve got tornadoes in the Midwest. We’re not the only state with these types of issues.

Right.

So why does it feel like the insurance industry is so different in California?

One of the things that goes on behind the scenes with insurance companies is that we have the California Department of Insurance; we have the Commissioner, which is an elected position. And, part of that commissioner’s job is to look at rate and to approve whether an insurance company or not should be increasing rate.

Prop 103, which some of us are familiar with, was passed several years back. One of the components of the Prop 103 legislation was that any time an insurance company wants to raise their rates beyond 6.9%, so if they want to increase their rate 7% or more, they have to go through an extensive process to basically prove or show the California Department of Insurance why they need rate.

It’s interesting because it’s talking to the insurance companies and going, well, if we’re having to go to the California Fair Plan, we’re seeing rates go up 50-100% …. the worst case is 200 or 300% …. Why can’t these insurance companies, on the private side, be able to stay in the market and increase their rates 20, 30%? Because at the end of the day, I think anyone would much rather pay 20 or 30% than 200% or 100%

Wow. So, it sounds like the solution is to allow insurance companies to increase their rates more because that would still be less than what people are faced with on the Fair Plan. But they’re only able to increase by 6.9% every year. What if they just did that every year? 6.9% in four years, you’d have roughly what you’d need.

Tune in for Part 10 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Impact of Rate Regulation on Insurance Companies + the Reinsurance Market and its Impact on Rates

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.

A Conversation with Caldwell Insurance: Loss Ratio + Loss Ratio and Insurance Company Profitability (Sonora, CA)

And once again, we talked earlier about an insurance company. They need to make a profit, right? At the end of the day, it’s not a non-profit business. So, for every dollar that they’re paying out in claims, they need to make sure that they’re taking a dollar in on the premium side. And in this article, it goes in depth here, and they were talking about the loss ratio, which is, once again, the money that’s coming in versus the money that’s going out in claims.

And they shared some interesting figures here. They said that in 2022, so last year, their loss ratio, they were at 108.8%. So we round up to 109%. So, for every dollar that they were taking in, they were paying out one dollar and nine cents.

Wow.

And then, in one of their other markets where they operate, they were at a loss ratio of 105.3%. So what these companies are doing, from their perspective, is stepping out of the marketplace and going until we can figure out where the dust is going to settle and how we can charge rates.

It’s almost created this perfect storm or this vacuum in the state of California because we all know that when the private sector kind of steps out of things and there’s no competition in the private sector, what are we left with?

We’re left with this insurance pool, which we referred to as the California Fair Plan, which everyone says is not fair, and they’re absolutely accurate.

How does California, and the fact that they’re pulling out of California… where are they going? How does California compare to other states? Because we’re not the only state that has catastrophic wildfires. We’re not in Florida. They have flooding; they have hurricanes. The South has hurricanes. You’ve got tornadoes in the Midwest. We’re not the only state with these types of issues.

Tune in for Part 9 of the State of Fire Insurance in Tuolumne County, where Justin and Ryan discuss the Insurance Industry in California Compared to Other States!

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.

Conversation with Caldwell Insurance: Disasters in California + Insurance Crisis in Tuolumne County (Sonora, CA)

Well, and it’s funny, it seems like we’re in California, right? Every ten years, there’s some kind of disaster that becomes THE disaster. We had earthquakes in the 90s, like you said. We’ve had riots in the past. We had flooding as a major issue in California. We’ve got it all.

And it seems like that has become the big focus in the insurance industry. And clearly, fire is the big focus right now in the state. Are we just on a cyclical wave here? Is it going to improve? What do you see happening in the future?

I mean, do we need to wait for some other terrible disaster to affect another part of the state so that the focus is less on forested areas, or what does the future hold?

Tuolumne County, clearly, we have an insurance crisis going on. The market hasn’t been getting any better. It’s only been getting worse. We step back, and we look at the state … the states being affected as well. On almost a weekly basis now … if not a daily basis … sometimes it seems like there’s another company that’s pulling out not of just out of Tuolumne County, but out of the entire state of California.

The most recent one, and I had printed out an article here, was Kemper Insurance. Not a huge name, but a fairly big player in the homeowner and auto insurance. And the title of this article here was “Insurance Failing: The Most Disruptive Personal Lines Environment that the CEO has ever seen from Kemper Insurance.

And once again, we talked earlier about an insurance company. They need to make a profit, right? At the end of the day, it’s not a non-profit business. So for every dollar that they’re paying out in claims, they need to make sure that they’re taking a dollar in on the premium side. And in this article, it goes in depth here, and they were talking about the loss ratio, which is, once again, the money that’s coming in versus the money that’s going out in claims.

We’d be happy to review your insurance coverage options with you! Give us a call at (209) 532-5102 or visit https://caldwell-insurance.com.