We have had many years of severe weather with an increased frequency of claims for wind, hail and water damage, including water backup/sump overflow. This claim frequency has resulted in increased rates for homeowners insurance and other property insurance lines. When the industry pays out more than it collects in premiums for a line of coverage there are three strategies to correct results. A company can stop writing this line of coverage, increase premiums to make the line more profitable, or tighten up on underwriting with the goal of writing better than average risks to improve claim results. A combination of these actions has made the homeowners market more difficult.
An account with two or more claims in the past 5 years is very difficult to place at any price. The point is that higher deductibles make even more sense today than they have in the past. Deductibles of $2,500, $5,000 or $10,000 can make sense depending on the home value and premium amount. With the higher deductible you will enjoy a lower premium. You will self-insure smaller claims which will not result in an increase in your renewal premium. This will also make it easier to qualify for a better rate with another company. A property insurance deductible of less than $1,000 is difficult to justify in today’s market. We will continue to recommend higher deductibles as a strategy for dealing with increasing rates in the homeowners and property lines. Give us a call to discuss your options further.
Recent Carrier Actions
- Higher Minimum Deductibles Ranging From $1,000 to $2,500 (Vary By Value & Claim Record)
- Claim Surcharges For Renewing Policies With Prior Claims
- Tighter Eligibility Restrictions For Older Roofs & Prior Claims
- Five Year Claim History Review Including Claims Closed Without Payment
- Shortened Reporting Period For Certain Weather Related Claims (Hail)