How will the 2024 elections impact P&C insurance?
This election could clarify some contentious issues.
On Nov. 5, 2024, citizens on the United States head to the polls to decide who will sit in the Oval Office come January 20th and who will run the U.S. Congress as well as state government posts.
Besides selecting the country’s future leaders, this election also could clarify some contentious issues for the the property and casualty insurance sector and its customers.
“The 2024 elections could bring about significant changes to property and casualty insurance,” says Austin Rulfs, founder and property & finance specialist at Zanda Wealth. “For example, a key issue is disaster preparedness and how insurance companies are required to cover climate-related damages. If the elections lead to more stringent climate policies, insurers might face new obligations to cover high-risk areas, which could drive up premiums.”
On the other hand, a focus on deregulation could see a loosening of these requirements, potentially lowering premiums but at the cost of increased risk for consumers. “Voters who have been affected by natural disasters are likely to be very sensitive to these issues,” Rulfs says.
So-called down ballot elections should be a particular focus for voters and for P&C companies, too.
“All insurance rates are state regulated,” says Michael Silverman, president of Silver Lining Insurance Agency in New York, N.Y. “State level elections are more important to the property & casualty industry — for rates and laws.”
What issues are on the P&C industry’s ticket heading up to election day/? These key “impactors” lead the list.
Home and auto insurance
The next administration may offer tax incentives or subsidies for green homes and energy-efficient vehicles, which will impact P&C providers.
“P&C insurers might follow suit by providing premium discounts for eco-friendly homes and cars,” says Angelo Crocco, owner of AC Accounting in Randolph, N.J. “While some insurers already offer such discounts, increased government incentives could make these discounts more widespread and impactful, leading to a more significant shift in the market.”
Suppose the next administration pushes for more tax incentives or subsidies for green homes and energy-efficient vehicles. In that case, Crocco expects insurers to offer more substantial premium discounts for eco-friendly choices. “It’s not just a feel-good policy. It can drive real market changes, leading to more widespread adoption and a shift in insurance premiums,” he notes.
Business insurance
The business-insurance sector is one area with the widest public policy gap between the two main U.S. political parties, albeit at the state and local levels.
“Business property/liability coverages like personal insurance is state regulated and has not been a major discussion on the federal election discussions,” Silverman says.
One issue for companies and for workers is how the election could impact gig economy workers. “If a Democratic administration pushes to reclassify gig workers as employees, it could completely change the landscape of business insurance, especially in terms of workers’ compensation and liability,” Crocco says. “This could mean increased costs for businesses but also better coverage and protections for gig workers — a complex trade-off.”
The takeaway
Should consumers expect rates to come down on key household insurance policies after the election is over? Maybe not, experts say.
“Claims continue to rise, climate changes has caused more and more natural disasters for the insurance industry and costs are rising to repair homes and businesses,” Silverman says. “P&C insurance rates may settle for a bit, but they are surely not going down.”
Brian O’ Connell is an analyst with insuranceQuotes.com. This article is published with permission and may not be reproduced.
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