One Group of People Is Getting Hit With Higher Insurance Premiums — Are You at Risk?
Written by
Dawn Allcot
Edited by
Amber Barkley
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Insurance premiums are growing harder to fit into the budget across the U.S., and these increases may not all be related to climate change and weather-related disasters, despite what many would expect. In particular, the rates for umbrella policies — which high-net-worth (HNW) individuals often need — have gone up by an average of 15% over the last several years, according to research from HUB Private client.
The 2025 HUB Outlook Survey revealed that there has been a 57% rise in liability settlements in the U.S. over the past 10 years.
“Our annual research found that social inflation is driving liability claims far faster than can be explained by economic factors,” said Robb Lanham, chief sales officer for HUB Private Client. “At HUB, we are seeing a big rise in the cost that social inflation is causing.”
Even with insurance rates rising, make sure you have the insurance you need to protect yourself.
What Is Social Inflation?
Insurance premiums can rise for many reasons, including increased risks or higher coverage limits.
“As people have more wealth, they buy more expensive things. And those expensive things require higher insurance premiums, and more coverage,” said Brian Weiner, founder and CEO of the Family Office Resource Group.
But social inflation has a different cause. Social inflation refers to increased insurance rates as a result of an increasingly litigious society.
“I think of social inflation as the rise in insurance premiums that is faster than the general economic rate of inflation,” Weiner said.
Lanham added, “Social inflation is basically when you have a rise in insurance claim costs as a result of increased litigation, broader definitions of liability, more plaintiff-friendly legal decisions and larger jury awards to the plaintiff. As a result, HNW individuals need to consider larger umbrella limits.”
How Insurance Companies Determine Risk
When an insurance company underwrites risk, Lanham explained, they consider the property side, which is what the person owns, and the casualty side, which amounts to what that person could be held liable for.
“We live in a world where there is always someone to blame,” Lanham said.
When someone sues an individual or organization, it’s no longer just about the plaintiff receiving a fair settlement. “It’s about holding businesses and people accountable for things they may not have been thinking about, which could have contributed to an issue,” Lanham explained.
Are You at Risk?
People at risk of lawsuits range from CEOs or board members of corporations to social media influencers who may recommend — or disparage — a specific company.
“There’s very little room for error in their lives, so insurance companies who offer policies have to compensate for that risk,” Lanham said.
But, even if you don’t have a high-profile career, it might be worth protecting your assets with an umbrella policy.
“There is this societal shift where it’s easy to sue people because it’s not their money, it’s the insurance company’s money,” Lanham said.
“Wealthy people may be targeted more,” Weiner said, “but we are all at risk!”
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