WEST BEND, Wis. – Neighbors in West Bend, Wis. and Washington County, Wis., are trying to survive an inflationary scenario for groceries, gas, utilities, and more… One chapter that is often overlooked is insurance. is.
Kyle Stolze, owner of Stolze Insurance in West Bend, Wisconsin, has some disturbing news to lock in for 2025. “The insurance industry is facing unprecedented challenges, making it one of the most difficult times in more than 40 years,” he said.
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“I have been in the insurance industry for 18 years and have never seen anything like this. We are in the toughest insurance market in 40 years. We are imposing an unbelievable rate hike.”
Factors causing change
Stolz believes the challenge lies in several issues. “General inflation is a major factor. Vehicle repair costs are rising and we are also facing significant supply chain disruptions,” he said. “Furthermore, the rising cost of litigation is also a significant concern. If you listen to the radio, almost every ad you see is a lawyer exhorting you to sue your insurance company. This litigation culture leads to high court judgments and ultimately It’s driving up insurance premiums.”
Stolz said multiple insurance companies across the U.S. are consolidating or exiting the personal lines market altogether. “Many insurance companies are now focused solely on commercial insurance. It has become too unprofitable to remain in the private practice,” Stolz said, adding that prominent companies have exited certain markets. .
Client reactions and concerns
With auto and homeowners insurance prices increasing, people tend to shop around on the market. Mr. Stolz said he could try…but everyone is in the same position.
“It’s not just one insurance company facing a backlash, it’s the entire industry,” he said. “Customers from all over Wisconsin call us looking for better rates, often from companies we don’t represent.”
In an effort to mitigate rising premiums, Stolz suggested adjusting deductibles as one of the most effective strategies. “Insurance companies are raising minimum deductibles, similar to what we saw in the health insurance space a few years ago. If customers want a more budget-friendly option, they need to set higher deductibles. There is.
“For homeowners, companies are now requiring percentage-based wind and hail deductibles. As rates go up, so do deductibles. It’s exhausting for everyone involved.”
The road ahead
When asked about the future, Stolz said there is a lot of uncertainty. “I wish I could predict what will happen next year. Our field personnel are also in the dark. This situation could develop further, but it’s hard to say at this point.”
Natural disasters such as hurricanes further complicate matters. “Insurance companies buy reinsurance, so these events affect all insurance companies,” Stolz said. “When a catastrophe causes the reinsurance market to raise premiums, those costs trickle down to policyholders.”
big picture
Stolz acknowledged that many people are considering changing insurance agents or companies in search of better premiums. “It’s a choice, but the reality is everyone faces these challenges. Some companies are better equipped to weather the storm, but the industry as a whole is feeling the pressure.”
Reflecting on the current state of insurance, Stolz emphasized the need for transparency and understanding. “I wish we had a clearer answer, but inflation, supply chain issues and legal costs are all piling up.”
As a side note, the Social Security Administration announced that Social Security benefits and Supplemental Security Income (SSI) payments will increase by 2.5% in 2025. “On average, your Social Security retirement benefits will increase by about $50 per month starting in January.” Social Security Administration.
Click here for the latest inflation rates.
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