When you run a law office, the last thing you want to worry about is insurance. It is not a topic that just pops to the top of your mind. We were contacted by a law practice in Waco this week as a bit of a surprise. They had built a steady business, helped countless clients, and never had a single insurance claim. So, when they opened the mail and saw that their business insurance policy would not be renewed, they were caught off guard.
The nonrenewal notice didn’t explain much. The insurance company had decided to stop offering commercial insurance policies in Texas. That was it. No offer to renew. No option to stay with the current coverage. Just a deadline. They had a few months to find new insurance coverage, or they’d be running the practice without protection.
They had no idea where to start, and who really wants to deal with insurance companies? Would it cost a fortune to make this change? And why was this even happening?
Why Insurance Carriers Are Pulling Out
This law office wasn't the only one getting this kind of letter. Business owners all over Texas were facing the same problem as the most risk averse companies do not feel like they can take enough rate increases to cover the catastrophe exposure due to weather found in Texas.
Insurance companies are leaving certain states or cutting back on how many businesses they cover in several high risk states. One big reason? The weather. Storms, hail, freezes, fires and other disasters have led to more insurance claims. Companies are paying out more money than they used to due to inflation. Some have decided it’s just too expensive to stay.
Another reason is how these companies measure risk relative to insurance rates. Even businesses with no claims, like the Waco law firm, can still be affected if an insurance company thinks an area is too risky overall. When that happens, they stop offering policies to current customers, leaving business owners with no choice but to find new coverage.
What Business Owners Should Do Next
When you get a nonrenewal notice in the mail, you have a choice. You can wait and hope something changes, or you can take action and find the best insurance before your renewal period runs out. If you’re in the same situation, here’s five easy steps you need to take.
1. Understand That It’s Not Just You
Getting an insurance nonrenewal notice feels personal, but it’s not about your business. Many companies are being dropped because the insurance provider is leaving the market, not because of anything they did wrong. The insurance crisis has deepened.
2. Your Coverage Will End, So Plan Ahead
Realize that your current policy had an expiration date, and after that, you have no financial protection from claims. Don’t wait until the last minute to go look for insurance availability. Give yourself time to find the right type of coverage before your current policy runs out.
3. Expect Pricing to Be Different
When you start looking at new policies, understand that prices have likely changed since you last shopped. The cost of policies has generally gone up. That’s because the entire insurance market has shifted due to catastrophe costs and reinsurance costs. Focus on the total cost of risk. Consider the premium plus the maximum out-of-pocket costs for a claim. This matters more than just the annual premium.
4. Not Every Insurance Plan Is the Same
Most people think they can just grab a new policy and move on like they do with homeowners insurance. But after looking closer at business owners insurance policies, you can see that some plans have lower coverage limits. And some don't include key protections. Every applicable insurance policy has different rules, so it’s important to compare policies carefully.
5. Start Shopping Now
Don't wait. Waiting too long can leave you with fewer options. Working now with an experienced, commercial insurance agent can allow you to find the right coverage. Insuring businesses is more complex than a traditional auto policy. Working with a specialist and giving them time to find the right business-related insurance policies allows you to sleep at night.
Work With Someone Who Knows Business Insurance
Many people who start a business as a solopreneur don't always secure an insurance policy until they have to. When they finally do, they just call the person who handles their homeowners policy. They may or may not work out.
Many of the companies leaving business owners high and dry are the big, traditional homeowners insurance policy companies. When they decide to leave Texas because they can't handle the business risk, who is going to have your back when you are on your back?
Don't leave the future of your business to guess work. Great commercial insurance agents are independent and not tied to just one company. They ask questions, look at different policies, compare coverage, and help business owners like you make the right choice. They also know which companies are still offering business insurance in Texas, saving time and frustration.
Get the Best Coverage for Your Business Today
If your insurance company is leaving you high and dry, you don’t have to face it alone. Insurance For Texans has been helping Texas business owners for years. We have a combined experience of more than 50 years to keep your business properly protected.
The right coverage is out there, and our agents can help you find it before your current policy runs out. Don’t wait. Click the button below to get True Texas Insurance today.