Which term best describes a market with increased pricing and restricted coverages?

The term that best describes a market characterized by increased pricing and restricted coverages is "hard market." In a hard market environment, insurance companies often tighten underwriting criteria, resulting in higher premiums for policyholders and less coverage availability. This situation typically occurs when insurers face significant losses or greater uncertainty regarding risk, leading them to become more conservative in their operations.

During such times, policyholders may find it challenging to secure insurance at a reasonable price, and they might face limitations on the types and amounts of coverage available, as companies seek to reduce their exposure to risk. This contrasts with a soft market, where there is greater competition, lower prices, and more generous coverage terms, as insurers strive to attract more business. Understanding these market conditions is crucial for anyone involved in the insurance industry, as they significantly impact pricing strategies, underwriting practices, and overall market dynamics.