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  • The Insurance Pros

Rate going up? Let us help!

Have you ever felt frustrated over your insurance rates going up? Premium increase can be frustrating! Especially when you've not had any tickets or accidents in years. Rates should reflect your personal habits and history. At least that's what one would think. The reality is, the majority of the rate is determined by situations out of our direct control. Here's how it works, and what you DO have control over.

Discounts: (Control) Discounts available to individualize your rate. For example: No recent claims, good student, longevity, multi policy, bundle, and others. These can generally lower your rate by about a 20% to 30%

Surcharge: (Control) Opposite of discounts, surcharges individualize rate upward. For example: claims, tickets, accidents and other items. Increasing rate around 20% to 30%.

THE BIG ONE........Premium Factor: (No control) The driving force behind rate is premium factor. Despite discounts or surcharges, "Premium Factor" trumps all and is the bulk of your rate. What is it? Simply put, it is cash "in" vs cash "out". If a company is paying out more than it's bringing in -adjustments must be made. Current issues in the industry would include, but not limited to: Increased cost of items insured, economy, population growth, natural disasters, unexpected disasters etc. (think about the recent string of devastating fires in California - home insurance rates are increasing rapidly!)

What Can You Do About It (Control)

Rates will always fluctuate. Chasing the lowest rates each year can be a huge pain and inconvenience with your time and money. Not to mention that approach can have some negative ramifications. The most cost effective approach is to allow an independent insurance agency to review your policy each year and advise you on the best options. They can help you understand your specific insurance company's history, premiums and underwriting.

There are three types of companies in the industry. You want to "ride out the wave" with the most preferred and historically stable ones. Don't be tricked by catching a low premium with an otherwise historically high premium company (such as Geico, State Farm, & Allstate) Please let us know if you have any other questions, and thank you for your continued support!



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