Why are insurance premiums continuing to rise?

If you have home or auto insurance, you have likely already noticed increases in your premiums.  We want you to know this is not personal, and it's not based on a claim you may or may not have had; it's simply the cost of doing business.  If you have yet to get a rate increase, be prepared for one at your next renewal if you get renewal terms at all.

Claim costs have risen dramatically in the past two years, resulting in carriers having to raise premiums or pull out of some insurance markets.   The market has been disrupted, and it WILL affect you.  We have seen premiums double or even triple from the year before. 

As a result, some carriers are temporarily suspending the writing of new policies or completely halting the acceptance of new business.  Additionally, some carriers are requiring full premium payment for new business and changing their underwriting guidelines.  For instance, some are imposing conditions such as no claims within five years or requiring home and auto bundles.  Furthermore, some carriers are not reinstating coverage if it lapses, regardless of the reason.

Why have my premiums increased?

• Home rebuilding costs have increased dramatically due to the rising cost of materials as well as labor shortages.  Supply chain for building materials continues to be an issue.  Insurance carriers are struggling to pay these higher prices without in turn charging higher insurance premiums.
• Automobile repair costs have increased considerably due to rising parts and labor expenses.  In addition, newer vehicles include more and more costly technological features.  For example, the cost to replace a side mirror or windshield has more than tripled.
• Payments for bodily injury claims due to auto accidents continue to rise.
• Legal litigation is expensive, and settlement amounts being paid out are increasing.
• Auto accidents have become more frequent, and the number of fatalities caused by such accidents has also increased.
• Reinsurance (the insurance your insurance carrier buys to help cover catastrophic loss) is at or approaching maximum capacity in many markets, and the resulting rising rates are unsustainable.

What can I do to combat increasing premium costs?

• Consider Higher Deductibles – Increasing your deductible(s) will help reduce your annual premiums.
• Ask for a Discount Review – Every carrier offers different discounts.  Contact your agent to ensure that you are receiving every discount you may be eligible for.
• Do NOT let your policy cancel or lapse for any reason (including non-payment) – Carriers are not reinstating coverage as easily as they once did.  Your carrier may be unwilling to reinstate your coverage, leaving you in need of a new policy immediately and forcing you into a market with more difficult standards to meet and higher premiums.  
• Loyalty Matters – Changing your insurance carrier too often can hurt you in the long run.  Some carriers will decline writing a policy for a new client if you have been insured with your current carrier for less than two years.
• Follow the Laws – Tickets and/or traffic violations may increase your premium, depending on the carrier.
• Seek Claims Counsel – The principle behind insurance coverage is to cover catastrophic losses.  Should a loss occur, talk to your agent before filing a claim.
• Enroll in Automatic EFT or Pay in Full - Did you know that many carriers will give you a discounted rate if you agree to Automatic EFT (Electronic Funds Transfer) or if you pay your premium in full?  Enrolling in Automatic EFT or paying in full can also help you avoid unnecessary late fees and the risk of a lapse in coverage.
• Buy from a Town & Country insurance agent – Our agents are knowledgeable, experienced and can provide you with options to help navigate this market without sacrificing coverage.

Town & Country Insurance agents are licensed representatives of the carriers we write with.  We are here to help educate, manage your account with the carrier, and to provide claims counsel when necessary.  Our agents are here to provide you with the insurance policies that best fit your specific needs.

If you have any questions regarding your policy or insurance carrier, please contact us today. We are here to serve you!