Monday, February 3, 2020

Do claims affect my premium?

   Do you get frustrated by increasing insurance rates? The truth is, costs increase each year. And insurance is included.
   Texas is the most volatile weather state in our country. We have hurricanes, hail storms, thunder storms, snow, flooding and even an occasional earthquake! Most states have one, maybe two, of these types of weather. But things are always bigger in Texas, so we have all of them. This volatile weather leads to the number one reason for insurance rate increases; Claims.
   "But I didn't file a claim!" you cry in frustration on the phone to your agent. To which your agent may reply, "But your neighbors did." And then you shake your head and think to yourself (or out loud), "So I have to pay for their claims?" Yes, yes you do.

        Why do I have to pay more?

   Insurance companies are not repairing your damages for free. They are in it to make money (like every other company out there). Insurance is big business. And like every other type of company, if a carrier has more expenses (usually claims expenses) than they budgeted for, they will have to raise their rates to cover those expenses. So if there are major hail storms in January, chances are many carriers are going to have to raise rates to pay for those claims by year's end. So even if you didn't file a claim, but others did in your area, the carrier will most likely raise premium for everyone in the area to cover costs.

I hear the carriers try to keep from paying out claims.

   Most of the carriers I have seen do try to take care of the customer in a fair and appropriate manner. Of course "fair and appropriate" means different things to different people. But what you might keep in mind is that the insurance carrier is the one taking the risk. If you had to pay someone $500,000, wouldn't you make pretty darn sure they are eligible recieve the money? I know would!
   Whether it is $5,000 or $500,000, there are rules and guidelines to paying out claims. These are supposed to guide the carriers in evaluating what claims to pay and to what extent. There are some carriers who are being sued in a class action lawsuit by the state for not paying out eligible claims. So we know there are watchdogs out there looking out for the consumer. If you have a carrier who did not take care of you for an eligible claim, I am very sorry. And I urge you to call the Texas Department of Insurance (TDI) at 1-800-252-3439 and report them or file a complaint online. Make sure the company takes care of you!

Wrap Up

   * So my point here is that claims are the #1 reason premiums are increasing almost every year. There is no way around that. All insurance carriers are not evil any more than all consumers are scam artists.
   You can counteract increases by shopping around. (Another good reason to go with an independent agency!) When it is renewal time, we can re-shop the client if the premium has increased quite a bit. We don't guarantee a lower rate, but at least we can see if we can find something better for them. In today's world, there are many options available to you!

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