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Big changes in the insurance industry can affect your coverage!

We have seen MAJOR changes in the insurance industry in the past year. We feel compelled to explain why those changes are taking place and to communicate to our policyholders the things that you will be able to do to protect yourselves and your insurability. The information that we want to share is not only important to maintaining your ability to retain coverage, but it is also important to controlling your costs. Because this information is vital, we want to encourage you to read it carefully and note that the following are NOT SPECIFIC TO ANY ONE INSURER.

Reviewing your policy renewal for changes to coverage and deductibles have become vital!

We are all seeing dramatic increases in prices everywhere we look. Increases in our utility bills, at the grocery store, and throughout the insurance industry. I want to address what’s causing these changes. A very major factor is weather: we have had more weather events in the past year that have resulted in catastrophic losses than in any year prior. In addition to the weather, we are suffering from supply chain shortages, inflation, government regulation, increased labor costs, litigation, and an uncertain stock market. All these pressures have come to bear on the insurance industry at the same time. This results in cost increases and adds restrictions to policies as insurance companies are forced to react.

The insurance companies have answered by raising minimum deductibles, implementing percentage wind & hail deductibles, more stringently evaluating risks (in ways that we will explain later), refusing to reinstate policies after nonpayment of premium, and scrutinizing claims history.

PROPERLY MAINTAIN YOUR PROPERTY & PAY YOUR PREMIUM PROMPTLY

A well maintained home and premises helps to reduce the exposures that could increase the likelihood of a claim.

In evaluating risk, insurance companies look at pride of ownership, which is reflected in the maintenance and condition of your property. It is best to maintain your property in excellent condition. Make sure that it is neat and free of debris. Be certain that there are no overhanging tree limbs. Take care of regular maintenance such as replacing your roof, painting, repairing siding, and cleaning your gutters. Be sure to update the coverage you have in your home, especially in this age of high inflation where replacement and repair costs have skyrocketed in the last few years.

Aside from the physical property, another one of the most important factors insurance companies look at is whether you pay your bill on time. Companies have become highly restrictive about reinstating cancelled policies meaning that if a policy cancels, we may have to find another home for it, and that will most likely be at a higher price.

BECOME PROACTIVE IN CLAIMS AVOIDANCE

Careful and responsible driving is an important factor in protecting your insurability and keeping your insurance costs down.

Regarding auto insurance, it is important that you do everything you can to prevent losses and claims. Moving violations, tickets and accidents of any kind make a significant difference in the price of insurance. And once again, be sure to pay for your policy on time and avoid cancellation at all costs. Any lapse in coverage will automatically cause a higher cost with most new insurers.

The changes that are taking place in the insurance industry are necessary for competitive reasons. Expensive claims greatly affect the pricing on insurance. When one company puts in price controls that make them significantly more competitive than another, others must react by doing something similar. The market evens itself out both in price and cost.

INSURANCE PROVIDERS HAVE TO RELY ON REINSURANCE

Another significant factor in the decisions insurance companies make is reinsurers. There are companies that provide insurance to insurance companies for catastrophic losses that occur. The price reinsurers charge affects the price you pay, and these companies serve the international markets and are thus impacted by catastrophic losses around the world. They place conditions upon the insurance companies who seek their services. Companies must maintain an adequate rating to get the most competitive price. Reinsurers can also make their policies conditional, requiring companies to institute controls like higher deductibles. We can see these conditions trickle down to you, the policyholder, as some our insurers have put conditions in place like minimum deductible requirements, wind & hail percentage deductibles, depreciation on wind & hail losses when roofs reach a certain age, no trees overhanging structures, and so on.

The bottom line is to be responsible. Ensure you have a neat and orderly premises that is properly maintained. Drive with care and caution to avoid claims and tickets. Pay your bill on time and do not allow your policy to cancel. Protect your credit and monitor your score. Responsibility is the key to success and savings.

The advantage of an independent agent like us is choice and understanding how the insurance industry functions. We are a local, independent agency owned and

We are your independent insurance advisor and are here to assist you through the process.

operated in the communities we serve. We intend to stay that way. While many agencies are selling to larger agencies, often as a financial investment, we remain independently owned with the intention of providing excellent service to our communities.

In closing, we want to remind you how VITALY IMPORTANT it will be for you to keep up with the continued communications you are receiving from your insurance company. These communications can arrive throughout the term of the policy, but you will want to pay close attention to the correspondence you receive from your insurance provider at the time of each renewal. It is with these renewals that carriers can make changes that may have impacts on the coverage and terms of your policy. They are legally required to give you notice of any change that does impact you and this is why it is so important for you to take the time to read your renewal and note these changes. These communications often can be found near the beginning portion of your renewal packets before your declaration pages.

As your agent, we of course, invite you to call and discuss any of the items with us as we promise to continue to be your trusted insurance advisor.

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