Posted by phil fernandez on July 08, 2003 at 10:38:18:
Good explaination Ken. Hopefully after this doubling of insurance premiums, there will be a period like we had for the past 10 years or so where the yearly premiums were pretty flat from year to year.
As you mentioned, there had to be a correction and it was certainly made this past year. So let’s hope the stock market improves, judges start throwing out " mold claims " and other nusiance lawsuits so that our premiums remain stable for awhile.
Which Prpoerty Insurance Company? - Posted by John Katitus
Posted by John Katitus on July 08, 2003 at 01:16:32:
I have commercial policies for one to four-family properties with Cincinnati and Westfield. Just received the renewals and premiums have doubled.
Time to get with a better and cheaper company. Which are best regarding cost and service? Thanks.
Cheaper doesn’t signify Better… - Posted by JT-IN
Posted by JT-IN on July 08, 2003 at 07:32:26:
John:
You mention Better, as in the two companies are inferior… Actually, I think that those two companies are two of the better companies out there today… (strictly my opinion, having doen business with both companies, and still do with the latter one).
Auto Owner’s is another company to shop, but what you will find is that a doubling in premium is more the norm of today’s insurance market. Claim issues involving MOLD and the fact that the insurance market has been soft (competitive) for the past 5 years or so… and companies are attempting to reduce business exposure by eliminating appx 15% of each agents clients, have hiked premiums for all of us. New underwriting practices have entered the fray, and there are now even more ways to rate up policies too… Whether it be past claims, your debt exposure off of your personal credit rating, your driving record, or the fact your home address ends in an even or odd number (I just made that one up, but it may be coming soon), all enter into the rating of whether you or I are an acceptable risk to the insurance carrier.
The ability to buy insurance, if even at double the premium, may become more of a factor than what it costs. My suggestion is to get with an agent/agency that really wants you as a client and shop within their companies. Consider reducing coverages or raising deductibles to lower premiums. Jumping from agent to agent may become more of a detriment, as time goes on, unless the market changes… and I don’t see it anytime soon.
Just the way that I view things…
JT-IN
Why they are more - Posted by ken in sc
Posted by ken in sc on July 08, 2003 at 07:59:54:
My agent, a very good guy who I enjoy a great relationship with, explained it to me like this and it made sense. Insurers borrow money from us in the form of premiums, invest the money, pay out claims, and keep the difference as profit. Since their return on investing has decreased (with low rates for bonds, mortgage paper, horrible stock returns, etc) and claims have increased as you said, naturally they must increase rates to stay profitable. I asked him if they would lower rates when their returns increased back to more normal rates and he laughed and said “probably not”.
Ken