Due in large part to the many natural disasters in the past several years, the insurance industry has shifted from a soft market to a hard market. Generally, a soft market provides wider coverage, lower premiums, and lower credit standards. Today’s hard market, however, involves less coverage, higher prices, and an increase in the required credit standards.

How does this apply to me?

The most obvious way that this shift applies to you is that your insurance prices are likely on an upward slope, and experts expect that trend to continue for the next several years. You may not notice right away, especially if the insurance company is raising rates through the back door – by raising the deductible instead of raising the premiums.

What should I do?

Take a hard, active look at your current insurance situation. If you haven’t already, consider subdividing your insurance policies so you can get the best coverage for each situation. Consider how much you actually need for each insurance type. Are you losing a great deal more because of hail rather than theft? Then you should adjust your insurance plans accordingly. Make your insurance carriers work for your business.

You should also be sure that your insurance company will notify you if there are going to be any changes in your policy. Many policies that the agent may inform you of changes or cancellation of your policy, but that simply isn’t good enough. Iowa law provides some protection for you:

• 10 days’ notice of cancelation for cause after the first sixty days of the policy
• 30 days’ notice is required if cancelation is due to the insurer’s loss of reinsurance
• 45 days’ notice if the insurer intends to refusal renewal of the policy

Seriously consider having your attorney look over your current policy. As a precaution, you should allow an attorney to look over any new policies that you are considering.