Insurers saw more expensive personal umbrella claims before the start of 2020, according to a General Ray analysis, and reinsurers expect such claims to continue as we emerge from the Covid-19 epidemic.
Personal umbrella insurance covers the cost of liability beyond the policyholders' homeowners or auto policy limits.
General Ray has tracked down some of the top drivers for big claims, and they have to do with some of society's most serious ailments. The top reasons cited were the increase:
Annual poverty rate;
Opioid prescription rates;
Fatal accidents;
Brain injuries;
Lawyer's representation; And
Injuries involving death and multiple claimants.
Other notable predictors associated with the severity of high claims include the lack of legislation allowing recreational marijuana and the lack of motorcycle helmet legislation.
General Ray said poverty, opioid use and marijuana laws are unpredictable estimates of the severity of the umbrella claim and all the findings of the analysis "will facilitate in-depth customer interaction on this line of business."
"Social inflation" - a term used to describe an increase in costs related to liability risks and litigation trends - is a concern for insurance companies. The incident has largely affected commercial auto and general liability lines, but the findings here - particularly the increase in attorney representation - suggest that it may enter the personal line.
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