When it comes to insurance, consumers typically focus on the monthly premiums they pay, but oftentimes many of us will neglect to read our policies until we really need them. It’s natural that we don’t want to consider the unpleasant things in life, like illness or accidents, until they occur.

The New Hampshire Insurance Department serves as a valuable resource for Granite Staters seeking clarity on the coverages of their policies. Additionally, we work proactively to identify critical market trends and help consumers understand their impact.

Consumers are understandably confused and frustrated over rising homeowners and auto insurance premiums, especially despite lacking a claims history or undergoing significant life changes to justify the increases.

These rising costs are the result of challenging conditions affecting the insurance industry, leading to what is known as a "hard market," characterized by escalating rates and limited coverage options. During a hard market, insurance companies become more selective about the risks they are willing to cover, and consumers may find it more challenging and expensive to obtain insurance.

Hard markets are cyclical, and typically follow “soft markets,” where conditions are more favorable for buyers with lower premiums and more relaxed underwriting standards. Both “hard” and “soft” markets reflect a basic supply versus demand dynamic.

Various factors, such as inflation, high interest rates, global supply chain disruptions, litigation costs, and natural disasters all contribute to the complex market conditions. Inflation has a widespread impact on repair costs and shortages on parts and materials, resulting in increased expenses for insurers. As these market pressures materialize, insurance companies adjust rates to ensure financial stability, solvency, and the ability to fulfill claims.

While market corrections are an inherent part of economic cycles, imposing burdensome regulatory measures can prolong or even worsen the challenging conditions. As regulators, insurance departments should seek to do no harm to our competitive markets – and ultimately to consumers.

The good news is that despite the repercussions of severe weather events and industry upheavals, New Hampshire has maintained a competitive insurance market, underpinned by a favorable regulatory environment and a commitment to the free-market system. Our insurance market provides consumers with a wide array of insurance choices, and remains robust and resilient.

At the New Hampshire Insurance Department, we encourage consumers to take the following steps to successfully navigate the challenges posed by the hard market: