​In the past few years, the homeowners market has been dealing with the effect of some of the costliest hail events ever, multiple hurricanes, unexpected tornadoes, wildfires and a global pandemic.

As a result, “the homeowners market is a firming marketplace,” says Jerri Gallatin, area president—western region, personal lines, RPS, “and we have been getting notifications over the last couple of weeks with increases from certain carriers that are coming across the board.”

One of the reasons for the rate changes is because carriers have reassessed their wildfire risk after realizing that some of their pricing was much lower than the risk, Gallatin explains. Furthermore, capacity is shrinking too.

“It’s kind of starting in California and it’s moving east,” Gallatin says. “Then, all it takes is a couple of hurricanes and flooding in the Midwest and it just creates chaos in the marketplace—the capacity really begins to shrink from there.”

“Carriers that aren’t exceptionally well-capitalized are really going to be feeling it all over,” says Ty Harris, cofounder and CEO of Openly, an InsurTech specializing in premium homeowners insurance. “And if I was a reinsurer, I think I’d feel like I’ve been playing whack-a-mole for a while.”

“We’ve had typhoons, hailstorms, hurricanes, tornadoes, wildfires and then there’s social inflation, which they thought was the big thing, but now there’s a pandemic,” he says. “Where does it all end? Is it all black swan events?”

While most of the effects of these events are a “state-by-state story” and can be “radically different,” Harris says, Gallatin is witnessing “cancellations coming in across the board, both personal and commercial,” some of which are coming in relation to the coronavirus pandemic, particularly rental policies and short-term rentals, as property owners do not expect homes to be rented and want to disregard the coverage.

For agents, dealing with cancellations has always been a tricky subject. However, the best course of action an agent can follow will always come from the carrier. “We’ve been getting notifications from our carriers with regards to cancellation procedures and what guidelines they’re following or what we should be doing,” Gallatin says.

“We’re not offering any advice right now on whether a client should file a claim or not,” she says. “We’re letting the carriers decide how this is going to work within their guidelines. If people think they have a claim, then they should go ahead and file a claim. And then obviously we will see how the carrier is going to address it.”

Amid economic uncertainty and rising rates, the independent agent can become even more valuable, despite the strains that their clients are under. “People are really price conscious,” Gallatin says. “I’ve spoken to top agents whose customers are unhappy about a $30 increase over the year.”

To combat potential sticker shock at renewal time, Gallatin recommends that agents should stay in touch with their clients “to explain what you’re seeing in the market,” she says. “Sometimes I just add a little extra value in my emails.”

“It sounds simple but just be ready to save people money,” Harris says. “There’s a lot more monoline homeowners carriers than there were 10 years ago and some are pretty neat.”

“Some agents are afraid to split up accounts within their existing book and break the home and auto apart,” he continues. “Sometimes that’s not the right answer, but getting more creative about how you’re shopping your existing book to save your customers money during tough economic times is going to be a demanded value add by customers.”

Will Jones is IA managing editor. This article was published in the June issue of Independent Agent magazine.

For more information on dealing with catastrophe, register for “In the Aftermath - An Agent's Perspective on Disaster Readiness and Recovery,” a webinar hosted by independent agent Danny Cook, who will share his experiences during Hurricane Matthew in 2016.