*Each month AssuredPartners NL will answer three common insurance questions faced by our clients. To submit questions for consideration, contact us.
The insurance industry can be complex and confusing, and the severe weather impacting the entire country in the past year or two is influencing the market today. We’ve been fielding many questions lately that are directly related to the extreme weather experienced in 2011 and 2012. Read on for answers to three personal insurance questions:
Why are my rates going up even if I have not submitted a claim?
If you’ve noticed an increase in your rates, even if you haven’t submitted a claim, you’re not alone. The severe weather events in both 2011 and 2012 have increased the number of claims submitted nationwide. The purpose of insurance is to spread the risk of loss over many people, and in the past few years a huge number of people have been hit with a weather-related claim. When there is an increase in the number of claims filed, everyone’s rates increase, even if you personally have not filed a claim. About $35 billion was paid out in claims in 2011, and in 2012 Superstorm Sandy caused more than $20 billion in damage. When more money is paid out, insurance rates go up.
Why is my deductible increasing?
The extreme weather we’ve been experiencing lately, including Superstorm Sandy and a long-lasting drought, have resulted in property and infrastructure destruction, crops dying and more. These events have caused an increase in claims filed, which directly impacts the deductibles offered by insurance carriers. Since more money has been paid out in claims costs recently, you can expect to see higher rates and deductibles offered by insurance carriers. However, not everyone will see deductible changes, so it’s important to take time and review your deductible with your agent.
Why is the replacement cost on my house more than it’s worth?
With the extreme weather in the past few years, it’s never been more important to make sure that your home is insured at the replacement cost, or how much it would cost to completely rebuild your home. Replacements costs are usually more expensive than the market value of your home, especially in today’s down housing market. This is because replacement costs cover more than just your home’s market value, including costs for labor and material expenses, contractors, taxes and fees, and much more.
When a catastrophe hits, you’ll want to be back into your home as fast as possible. Insuring your home at the replacement value can save you money in the long run and speed up the rebuilding process.
If you have questions about your home, auto or asset protection insurance policies or programs, our team of dedicated personal insurance specialists can help. Be sure to schedule an annual policy checkup and discount review to ensure that you’re insured properly and that you’re getting all the discounts you deserve. To learn more, visit: AssuredPartners NL Personal Lines or click here to contact an agent.