Risks and Remedies for Insurance Premiums
We recently wrote about the dramatic increases in premiums for home and auto insurance and what is behind them. Unfortunately, this trend won’t end anytime soon.
Most people blame the insurance companies’ focus on profits as the cause for these increases. Some people have suggested that insurance companies are nothing more than casinos or bookmakers–they control the marketplace and are not interested in paying out any claims. In this scenario, the insurance company always wins against the consumer.
The frustration with the insurance companies is palpable. However, in most situations, it is unwarranted. We are not saying this because we underwrite insurance. On the contrary, it would be so much easier on our agency if every policy was approved for the exact same premium quoted.
When premiums increase significantly, as they are now, it is due to the underwriting process–how insurers assess the risks for writing the policies. While this process may seem confusing, you can be both proactive and realistic so that your profile is a positive one for insurers.
To minimize your disappointment, frustration and anger with your homeowners and auto insurance and increase the possibility of lower premiums, here are some actions you can take::
Make sure your home and car are updated with quality security systems. You can save money on your premiums, as well as lessen the likelihood that you will need to make a claim.
Make sure your home vents, heating systems and other outlets from your home are cleared from leaves, moss, laundry vent buildup.
Clear out your basement and attic annually to ensure your home and your family’s safety.
If you haven’t replaced your roof in more than 10 years or are buying a home for the first time, have a qualified roofing contractor come out to do an assessment of repairs or replacement. Insurance companies are concerned about roofs in particular, and may cancel a policy if they are not satisfied with its condition. They are using technology such as aerial views and drones to survey the status of your roof: https://shorturl.at/AlsW1
Routine maintenance is less costly than having to go without insurance or having a major roof failure.
Pro Tip: Tell the contractor in advance you are not hiring them to replace your roof.
Your auto insurance covers comprehensive claims such as glass replacement or repair, fire, vandalism or theft. A little bit of money for coverage in the policy saves you a lot if you need it later.
If you have an accident, depending on the severity of the damage, consider having repairs paid for out of your own pocket. Comprehensive claims, while not chargeable to your insurance, do have a long term effect on your policy premium or renewal, especially if you end up with multiple claims over a short period of time. You may feel that you are owed the money by the insurance company, but if your premiums go up, you may be paying much more than you get from the claim.
Don’t ever go outside of the insurance claim process should you get into an accident with the other drivers involved. Many times, the other parties don’t have insurance, renege on the “agreement”, or are not authorized to make such bad offers. They may just be trying to get out of the situation quickly due to their own circumstances–the car may be stolen, or they are not the owner and have no authority.
Always call our agency for a review of your own situation to make sure you are properly covered for all known situations under your control. Remember, all types of insurance are really designed to protect you for situations you cannot afford, or would eat into your income, savings, and retirement.