West Bend, Wi – As neighbors in West Bend, Wi, and Washington County, Wi, try to work their way through inflation scenarios including groceries, gas, and utilities… one chapter often overlooked is insurance.
Kyle Stolz, owner of Stolze Insurance, in West Bend, Wi, locked in some unsettling news for 2025. “The insurance industry is facing some unprecedented challenges, marking one of the most difficult periods in over four decades,” he said.
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“I’ve been in the insurance industry for 18 years, and I’ve never seen anything like this. We’re in the hardest insurance market we’ve experienced in the last 40 years. Companies are going out of business, consolidating, and imposing rate increases that we simply aren’t accustomed to seeing.”
Factors Driving Change
Stolz attributed the challenges to several issues. “General inflation is a major factor. The cost of repairing vehicles has skyrocketed, and we’re also facing significant supply chain disruptions,” he said. “Additionally, the rising cost of lawsuits is a crucial concern. If you listen to the radio, nearly every other ad is a lawyer encouraging you to sue your insurance company. This culture of litigation has resulted in soaring judgments, which ultimately drives up insurance rates.”
Across the U.S. multiple insurance companies, according to Stolz, have either consolidated or exited the personal lines market entirely. “Many insurers are now focusing solely on commercial insurance; it’s become too unprofitable to remain in personal lines,” Stolz said, adding the prominent companies have retreated from certain markets.
Client Reactions and Concerns
With a one-two punch of increases in car and homeowner insurance, there is a tendency to try and shop the market. Stolz said you can try… but everyone’s in the same boat.
“It’s not just one insurer facing backlash—it’s the entire industry,” he said. “We’re receiving calls from clients across Wisconsin who are seeking better rates, often from companies we don’t even represent.”
In an effort to mitigate rising premiums, Stolz suggested adjusting deductibles as one of the most effective strategies. “Insurance companies are raising minimum deductibles, similar to what we saw in the health insurance sector a few years ago. If clients want a more budget-friendly option, they’ll need to carry higher deductibles.
“For homeowners, companies are now requiring percentage-based wind and hail deductibles. As rates increase, so too do deductibles. It’s exhausting for everyone involved.”
The Road Ahead
When asked about the future, Stolz said there’s a lot of uncertainty. “I wish I could predict what’s coming next year. Even our field reps are in the dark. This situation could evolve, but right now, it’s hard to say.”
Natural disasters, such as hurricanes, further complicate matters. “These events affect all insurers because they purchase reinsurance,” said Stolz. “When the reinsurance market raises premiums due to catastrophic events, that cost trickles down to policyholders.”
The Bigger Picture
Stolz acknowledged many individuals consider changing insurance agents or companies to find better rates. “While it’s an option, the reality is everyone is facing these challenges. Some companies are better equipped to weather the storm, but overall, the industry is feeling the pressure.”
As Stolz reflected on the current state of insurance, he emphasized a need for transparency and understanding. “I just wish I had clearer answers but inflation, supply chain issues, and legal costs are all piling up.”
On a side note: The Social Security Administration announced Social Security benefits and Supplemental Security Income (SSI) payments will increase 2.5% in 2025. “On average, Social Security retirement benefits will increase by about $50 per month starting in January,” according to Social Security Administration.
Click HERE for the latest inflation numbers.
