Re: Rising Insurance Rates

Posted by MarkB_MI on January 02, 2005 at 16:02:39 from (64.31.11.195):

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

There are two factors driving up insurance rates: First, interest rates have been very low for the past several years, and the stock market has been fairly stagnant. Since insurance companies make their real money on investments, not premiums, they're trying to make up for the poor investment returns by jacking up premiums.

The second reason premiums are going up is that 2004 was one of the worst years on record for insurance claims. The Florida hurricanes are a big part of that. Naturally, if you ask the insurance companies why rates are going up, they're going to blame natural disasters, since acts of god are out of their control, while lousy investments decisions aren't.

The only solution is to shop around. Make sure the agent actually delivers on the price he quoted. And make sure your "replacement value" insurance will truly replace your home; many policies won't cover improvements required to bring a house "up to code", even if the original house is completely destroyed.

One last comment: The insurance industry is the only major industry in this country that is totally free of federal regulation. All regulation is at the state level. In many states that ain't much.

Follow Ups:

• Re: Rising Insurance Rates Rob in Mo 17:31:38 01/02/05 (0)

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