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How long until “I told you so?”

How long until “I told you so?”

Today is a very good time for auto insurance customers.  Anyone wanting to buy auto insurance can find a very good policy at a discounted price. Regardless of your driving record; anyone seeking to buy a cheap auto insurance policy can find an agency, company or website and buy any type of policy with general ease.

You know exactly what I’m talking about. Open a telephone book, watch TV, listen to the radio, go online, open your mail or email; there are endless opportunities daily to shop for an auto insurance policy. It’s almost like the Roaring Twenties — No one thinks it’s going to end. It’s been good for so long, no one realizes that the auto insurance business is just like any other. There are good times and bad. What most people don’t want to hear and most unlicensed auto insurance sites don’t have a clue about is that the good times are coming to an end. The online broker you choose to offer your car insurance is going to make all the difference when your rates go through the roof or your carrier non-renews your auto insurance policy.

There are swings in every business marketplace. The insurance business, specifically auto insurance, is not immune. Consumers have enjoyed this easy market (or as it’s known in the industry as a Soft Market) for over 10 years. In fact; this is the longest Soft Market the auto insurance industry this agent has seen in 25 years.

So, if we have been in the longest Soft Auto Insurance Market in the last 25 years, what can we expect next? Is the Hard Auto Insurance market coming?

Before I can even attempt to give you an answer to that question, you must understand the difference between both a Soft Auto Insurance Market and a Hard Auto Insurance Market. It’s quite easy to understand.

A Soft Auto Insurance Market is what all U.S. drivers have experienced for the last 10-plus years. It’s been an time of contentment among all those who buy auto insurance. In a soft auto insurance market,  rates a typically low. Auto insurance is at very competitive rates is typically easy to buy.  Meaning, if you call an auto insurance carrier, they will sell you an auto insurance policy with little to no difficult underwriting. Car insurance rates are much lower because competition among auto insurance companies is much stronger. Auto insurance companies tend to adopt much more lenient underwriting requirements to tempt more new prospective buyers and keep their auto insurance policy holders by  keeping the annual and semi-annual renewals at the same price as the previous policy term. Although soft markets normally cause significant underwriting losses for auto insurance companies, the last 10 years have been an unprecedented time of profitability for most auto and home insurance companies.

A Hard Auto Insurance Market is a phase of the property and casualty insurance cycle which is dominated by higher demand and lower supply. When the demand for insurance increases faster than the available supply of auto insurance programs, the outcome is a hardening of the auto insurance market, a.k.a. “The Hard Auto Insurance Market”. In this type of market, auto insurance is generally more difficult for drivers to secure. Further, drivers are  more likely to pay a much higher price. The property and casualty insurance market, which auto insurance is a big part of, is cyclical. While periods of hard and soft market conditions exist, the entire cycle is irregular and can be unpredictable.

Let me say that again, Unpredictable.

The cycle can be affected by the occurrence of a major insurable event, such as a hurricane, tsunami or other natural disaster. With the soft market lasting for such a long time, this agent feels a major market change is coming. The economy over the next decade will play a big role in the hardening of the upcoming auto insurance market. During this upcoming hard market, auto insurance buyers will lose their freedom of choice.  Although you will continue to see, hear and read the major auto and homeowners insurance carriers ads on TV, Radio and print;  hundreds of  auto insurance websites will go out of business. Why will they disappear?  You see, when the market hardens, demand increases and  fewer carriers offer products. Although many auto insurance shoppers don’t realize, the majority of auto insurance websites don’t really sell auto insurance. Sad but true!  They merely sell your auto insurance information to agents. When demand increases, the number of leads will increase.  Not only will the amount they sell your lead information for will be reduced substantially, the agent’s and carriers will not need to buy leads because they will receive an increase of their own.  The unlicensed auto insurance websites will disappear from the internet as fast as they appeared a few years ago.

If you are represented by an insurance network like; you will not need to worry about these issues. represents the top 30 auto insurance carriers. When ever you receive a renewal with a huge increase; your policy will automatically be shopped for a rate that is the same or lower than your current rate.


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

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