What Policyholders Need to Know 2.0

Last year, I wrote a piece called “What Policyholders Need to Know About Their Insurance” where I outlined some important considerations for navigating the world of personal insurance. If you missed it, you can check it out here:
Read last year’s article

Since then, a few things have changed—or become more urgent—so I wanted to share some updated thoughts to help you stay informed and proactive.

Why Rates Keep Rising (And Why That’s Not All Bad)

Let’s start with the big one: rate increases. It’s no secret that insurance premiums tend to go up over time. For homeowners, these changes are often tied to the dwelling limit—that’s the amount it would cost to rebuild your home today. As that figure increases, so does your coverage for things like other structures and contents.

What many people don’t realize is that these increases are not arbitrary. Carriers must file rate changes with the State Department of Insurance, and those changes must be approved.

From a business perspective (and as a former business owner myself), I understand why this happens: insurers need to cover rising costs and still have enough in reserve to pay future claims. If they can’t break even or remain profitable, they can’t stay in business—and that doesn’t benefit anyone.

If you’re curious about your insurance company’s financial stability, you can look them up on A.M. Best, which rates carriers based on their financial strength.

Why Some Carriers Are Leaving the Market

You might’ve heard that some companies are pulling out of the personal insurance market—especially home and auto. After looking at a few of their past policies, I can tell you: they simply weren’t charging enough. They were underpricing risk, and now they’re out.

This is a tough reality, but it’s another reason why working with a knowledgeable advisor (like us) can help you navigate changes and find reliable options.

Simple Things You Can Do to Stay Protected

Here are a few quick tips to help you stay in control of your coverage:

• Pay on time—or early if possible. If a policy is canceled for non-payment, some carriers won’t reinstate it. Even if they do, a lapse in coverage could affect your rates next year.

   

• Consider setting up auto-pay. Whether it’s EFT or credit card, automatic payments are a great way to avoid accidental lapses. If you need help setting that up, just give us a call—we’re happy to walk you through it.

   

I know this can all feel a little overwhelming, but you don’t have to manage it alone. We’re here to answer questions, review your policy, or help you set up payment options that make sense for your situation.

Want a more detailed overview?
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