There has been a lot of talk in the news lately about the increase in insurance rates. The past decade has been difficult for insurers, especially home, auto and flood insurers, as increasingly frequent and violent storms have caused massive damage throughout the country. So the jump in rates is not exactly unexpected. But when homeowners and auto owners open their insurance renewal packets each year and see rates rising, a panicky feeling often ensues that leaves us all wondering just how high these rates can go.In reality, when you open your bill and see an increase in your insurance premium, if you compare the cost of your insurance against the value of the property you're protecting, in addition to the liability claims the insurance is shielding you from, you will probably calm a little as you realize the intrinsic value of your specific policy. The price of insurance is not likely to increase to the point where it's simply not worth having anymore. But insurers need to price policies appropriately so that they are collecting enough in premiums to actually pay the claims presented by policyholders.
When an insurance company increases your rates, it doesn't generally do so without logical justification. There will be an underlying, important purpose behind the rate hike. For example, it could be due to an increase in the risk that you present to the insurance company, or it could have to do with the impact of inflation on the overall cost of replacing or rebuilding your property. Both of these are completely valid and understandable reasons for increases and they don't generally result in a significant escalation in rates.
Of course, that doesn't mean that you should just roll over and accept change in your premium from year to year. Review your policies to make sure your coverage options are still appropriate for your level of risk and the value of your property. Also, make sure that your deductibles and limits make sense and ensure that you're taking advantage of every discount available to you. Further, if applicable, be sure to resubmit any information to underwriting that could change your premium. To make sure you’re getting the best deal you possibly can, compare rates at least annually—insurance is a competitive industry and if you’re not finding value in the protection offered with your current provider, perhaps it’s time to look elsewhere.
The question of how high insurance rates can go should not be the primary concern of insurance policyholders; instead, policyholders should be more concerned about conducting an annual insurance review and comparing quotes with other policies to make sure that they’re appropriately covered and getting the best deal for the coverage they need. To find out more about how you can schedule your annual policy review and compare Houston auto insurance quotes, give us a call at Reliable Insurance Managers today.
