THURSDAY, JUNE 12, 2014
What does Round that Account mean? Well it can mean a large savings to you on insurance, increased benefits and coverage at no extra cost, and better protection from rising costs and unfortunate policy non-renewals.
First, let me try to shed some light on why you see the change to your premium or having an underwriting problem with your company.
The insurance industry is in full swing of a "hard market" due to the last two years' weather conditions in our region. All carriers have made changes to their underwriting requirements and pricing adjustments to remain competitive in the business. As agents, we understand that this is not something you are happy about. We carry insurance too! So we understand the increased burden.
It's easy to misunderstand these increases as unnecessary; especially when you haven't had any claims or changes to your own policy. The insurance companies have to maintain certain loss ratios against their premiums. If they don't, their industry rating can drop and they can begin to lose the ability to write business at all! So even though you may not have suffered a loss the entire region has suffered greatly, and the carrier has to adjust their premiums to the entire region.
Ok, so that may not make you feel any better, but it is a major part of the reason for the increases. The good news is there is something you can do to help yourself. Talk to your agent about placing your home and auto together in the same company if they are not already. Bump your auto liability limits up a notch.
Here is why I say these things- every carrier, when determining the amount of increase or if they have claimed and are potentially a candidate for non-renewal, reviews the entire risk. They don't just say "oh, there's a claim, cancel them". I promise! But the claim is a factor, and they will look at other factors. Is this client carrying minimum limits on their auto, do we have both the home and auto, etc...
All these factors lead to an ultimate decision. For the most part, insurance decisions by carriers are mathematical statistics. It's not personal against you. When certain factors add up the carrier has to take some action to counter the statistical likelihood of a claim occurrence. Again, they do not do this to profiteer. The insurance business is highly regulated by state commissioners. They have to file changes with the state and be approved. They do this to maintain a favorable rating in the industry standards.
When you have your auto and home together, often times you can pick up a large discount on both, and guaranteed renewal. And bumping those auto liability limits up a notch? That little bump will usually be a very little cost difference, but the next time increases go around, you're less likely to be affected and it makes you a more favorable risk to the carrier. So when you do have a couple unfortunate claims occur, you don't get a non-renewal! It also helps with exceptions to underwriting requirements.
So talk to your agent, and see how rounding your account could help you!