 Surprisingly, your credit score IS one factor that can influence the price you pay for homeowners insurance coverage but why and how does it affect your insurance premium?
Studies have shown a correlation between credit history and insurance loss potential, indicating that individuals with poor credit tend to file more insurance claims and are considered to be a higher risk. In general, people with higher credit scores are seen as demonstrating more responsible financial behaviors, which may translate into more cautious and responsible actions in other areas of life, including homeownership. Insurance companies typically use credit-based insurance scores, not traditional FICO scores. These scores are specifically designed to predict insurance claims and are based on certain credit-related factors. including:  With insurance premiums having risen significantly over the past several years, increased attention has been directed on neutralizing climbing costs.
One effort that has gained attention for slowing and reducing these costs is tort reform. Tort reform refers to a set of changes to civil justice laws to reduce the number and cost of lawsuits. Evidence indicates that implementing tort reforms can help lower insurance premiums for both individuals and businesses. When insurance companies face lower costs from lawsuits and settlements, they can pass those savings on to customers through reduced premiums. Georgia has implemented tort reforms in phases, with significant legislation in 2005, additional measures through 2023, and continual refinements since then. How have past tort reform efforts regarding insurance premiums in Georgia fared? Here's a recap:  Insurance shopping can be frustrating. You submit the same information to multiple companies only to receive veryy different quotes.
There are numbers of reasons why these differences occur, and being aware of them can help you make more informed decisions about your coverage. Here are five:  A DUI (Driving Under the Influence) conviction can have significant consequences on your life, including your auto insurance.
Here's how a DUI affects your auto insurance and what you can do to navigate the situation.  Have you heard of "Operation Slow Down?"
Hopefully you have because it's currently under way in a number of southern states, including Georgia and South Carolina. Both highway patrol and local law enforcement agencies are looking out for drivers who are speeding or driving recklessly. Just for the record, do you know what would happen to your auto insurance premium if you did get ticketed for speeding? Here are 4 frequently asked questions (and answers) I get about speeding tickets:  Hardly a day goes by that I don't hear comments bemoaning the rise of homeowners insurance - or worse - the receipt of a non-renewal notice from an insurance company.
Why are these actions happening and affecting even those who haven't filed a claim on their homeowners insurance? Recent reports shed a spotlight on the data found, including these 4 eye-opening facts that help answer that question:  As insurance rates have climbed over the past several years, it has insureds hard pruning coverages to offset those increases.
It's understandable why they're doing that, but it's like gambling with their money. Many become significantly under-insured when they do that and take on huge financial risk. It takes just one event to financially destroy them, as the following examples illustrate:  Filing a homeowners insurance claim is a necessary step when disaster strikes, but many homeowners are concerned about the potential impact of a claim on their insurance rates.
Does your insurance premium go up after filing a claim? Here's the answer, along with some clarification:  As with other industries, the insurance market is cyclical, and we're currently in what's called a "hard market."
A hard market is when political, societal, climate, and other factors cause insurers' profits to fall. Over the past several years, the impact of these factors have combined to a point where insurers have experienced greater losses and have had to make adjustments to maintain profitability. Insurers have become more conservative in what they are underwriting causing their portfolios to shrink and clients' premiums to rise. Historically, hard markets haven't lasted as long as "soft markets," which is when market conditions are just the opposite. In soft markets, insurers' revenue reserves are higher and they are able to be less strict in the risk they underwrite. This allows them to increase their client portfolios, there is more competition among companies, and premiums are very stable over time. SO, what can you do while we're in a hard market to soften its impact?  I continue to get calls from people because their auto insurance premiums are rising at renewal time, and they're searching for lower rates.
Many of these potential clients haven't had any accidents, tickets, moving violations, etc. to directly cause their rates to rise, so why are they experiencing this? There are a number of factors that contribute to this, including these 5 reasons:  Telematics is the use of GPS and other technology in vehicles to track driving behaviors and habits.
Insurance companies use behavioral analytics to determine the driving behavior of their policyholders and adjust insurance rates accordingly. There are pros and cons for policyholders considering using telematics. Here are a few:  We've all experienced the increase in cost of goods and services over the past several years, so it's logical to anticipate that your insurance premiums might increase some, too. However, the amount of increased cost has taken some policy holders by surprise.
There isn't simply one major reason but a number of factors that have caused insurance premiums to rise. In addition to increasing rates, insurance carriers have also tightened requirements for insurance approval and/or renewal. Just like with increasing premiums, clusters of factors have made it more complicated to identify and predict risk. Technological advancements like machine learning and artificial intelligence have given insurers a more accurate way to predict risk by using huge volumes of data. So what kinds of data are now being used to modify (and tighten) criteria for insurance policy approval? Here are 3 lesser known factors you should be aware of that affect your perceived financial stability by insurers:  Historical data show that as people age, physical and cognitive changes may impact driving skills. Once you reach 70 years old, you can expect your auto premiums to rise. There are a number of things drivers at this age and older can do to lower their auto premiums. Here are 5 suggestions:
 When shopping for insurance, you've likely encountered a puzzling phenomenon: why do rates differ so drastically between insurance companies? It's a common question many find themselves asking as they navigate insurance options.
While it may not make sense on the surface, there are 7 valid reasons insurance rates can vary between companies: |
AuthorDennis Lam Archives
July 2024
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