ATLANTA — A major insurance company is trying to limit its risks in some parts of the country, making it a little more challenging for new customers to get a new policy -- including in Georgia.
Nationwide Insurance is the latest company to change the way it does business and says it had to because of the impact of inflation and different catastrophic weather events.
Starting Wednesday, Nationwide is asking for more documentation for new personal lines, before approving a policy quote in certain states, including Georgia.
CEO of Portal Insurance, Bradley Flowers, who is not affiliated with Nationwide, says that while this is unprecedented, it's not surprising.
"I've talked to some folks [at Nationwide] and they basically said that they're going to look at around a seven-day turnaround before they then turn insurance quotes around," he explained.
He said the longer timeline is on purpose.
"What they've effectively done, in my opinion, is they're limiting the new business they're writing without physically saying that because when you go to an insurance agent for a car insurance quote or home insurance quote, and they take seven days to turn it around," he said. "That's not conducive to getting a policy written in a certain amount of time."
He explained this is happening in the midst of a hard reinsurance market in which rates for insurance companies themselves - to protect their bottom line - are currently very high.
"The reinsurance is actually costing them more than it did the prior year," he said. "Therefore, the trickle-down effect of that is they need to go up on rates for consumers."
Flowers said in many states, the Department of Insurance has to approve the rate filing when an insurance carrier, like Nationwide, wants to make an across-the-board change.
"Most of the time, the rate increase that the insurer asked for, the state is not going to prove it," Flowers said. "What's going to happen is they're going to say, 'Hey, we're not, we're not going to write new business for a little while.'"
He said Nationwide might also be taking a closer look at renewals.
Flowers advised customers to speak with their agent and potentially hire an independent agent that can handle different carriers. However, customers should expect similar rates because he says most insurance companies are raising rates right now.
"In my opinion, Nationwide is a smart company. They're not going out of business," he said. "There's really smart people behind the scenes there. I think they're going to come out on the other side of this good."
A Nationwide agent who is based in Atlanta and wanted to remain anonymous tells 11Alive that if you're an existing customer buying or renting a new home, you'll also have to undergo these "strict binding requirements," but existing auto policies can still be changed.
The agent adds that while Nationwide did pay out its entire 2023 budget for storm damage by the end of May, a lot of the remaining payouts came from newer businesses that had been written.
"Nationwide has effectively paused writing new business by requiring extreme pre-binding requirements that are not typically required," the agent said. "Nationwide hopes this will help with profitability issues so they are in a much stronger position in 2024. In my professional opinion, most carriers will follow suit before the end of the year, especially as we head into hurricane season."
11Alive reached out to Nationwide, which said these changes vary by state and by product.
Georgia's Commissioner of Insurance and Safety Fire John King's office said it encourages Georgians to shop around when looking for insurance. It adds that its Consumer Services Team is available Monday through Friday from 8 a.m. to 5 p.m. to answer any questions.