Published: March 28, 2013

What a crazy Home insurance market!! 

Why are Insurance Companies raising premiums on Home Insurance in Colorado?  What can the consumer expect down the road?  Read this for some good insight. Below are some handy slides detailing some of the changes as we are seeing now and trends that this may not slow down.So what does this all mean? 

  1. The investment market has been sluggish for insurance companies and the rate of return is much less then in years past
  2. Combined Loss Ratios are much higher in Colorado for every carrier running over 100% losses on premium earned.
  3. Mother Nature seems to be on a mission increasing hail exposure, wind, fire etc
  4. The last 10 years we have seen premiums go lower and lower as carriers have been chasing eachthers rate down.
  5. Coverages inside policies has and continues to increase offering more claim opportunities
  6. Deductibles have not increased much in the last 20 years.  $500 deductibles were on many policies including Wind/Hail.

                         So what are the companies doing to change this?

  1. The obvious answer is to raise premium.  And they are doing it fast.
  2. Change the wind/hail deductible to a percentage.  This is happening now with many leading companies
  3. Reducing commissions to agencies if you don’t package Home with other products
  4. Offering increased commissions on policies such as Auto/Umbrella/Life to encourage agents to round out their policies for increased retention
  5. Underwriting New Business harder through inspections. (did you know that new business premium runs a 5-6% higher loss ratio?
  6. Eliminating expenses internally by downsizing.
  7. Strengthening the claims departments and watching each penny out the door.
  8. Expansive claims “Preferred Vendor Lists” to attempt to streamline the claims process
  9. Non renewing property coverage if there is a claim or two

Thanks for taking a peek at this. Feel free to email or call if you have a client that is being cancelled or the rate is going through the roof and we can look at one of 12 carriers here in Colorado. Need a quote?  Click here Rick Cline and StaffAll Access Insurance9200 W Cross Dr Ste 210Littleton CO 80123Office: 303-932-1700Fax: 303-218-7596http://www.rickclineagency.com/