Re: Rising Insurance Rates

Posted by Dug on January 01, 2005 at 20:17:35 from (63.167.143.119):

In Reply to: Rising Insurance Rates posted by Rob in Mo. on January 01, 2005 at 07:33:19:

Lots of advice, some good, some questionable. Here's the short version. An insurance company plays in a competitive field just like any other business. Premiums are based on actuarial projections of expected losses based on historical claims. To stay competitive, premiums must be kept in line with what the market charges. It is often the case that an insurance company will expect claims and admin costs to approach 100% (or slightly more) of premiums collected and count on investment returns for their profit. Now, combine a sluggish investment market and exceptional claims and we find ourselves in a position of rising claims to keep the insurance company in business. Afterall, they have certain financial solvency requirements mandated by the states in which they operate.

With all that said, if your insurance company is raising your premiums 60% you have one of two things occuring, either you have a large number of claims and they are politely telling you to go away, or they have a lousy investment strategy or did not properl reinsure and need your premiums to make up for bad investments/business choices. Either way, I would shop the market for a different insurance company.

Gotta luv them slick insurance fellas!

Dug

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