We’ll be the first ones to say it—knowing all the details about different types of insurance and how much coverage you need to protect your assets and your family can be a time-consuming and confusing process, especially if you’re not an insurance professional. That’s why our knowledgeable team is always happy to answer questions you may have about your insurance needs. In today’s blog, we’re going to address the three questions we hear most often—we hope you will find these answers helpful.
1. Why is my premium increasing?
There are many factors that influence the insurance premiums that you pay—some of them are related to your personal situation and some are related to the number of claims that your insurance company has paid over a period of time in specific geographic areas. The insurance premiums you pay fund the operations of your insurer and pay for claims and policy service.
So what factors may increase your premium costs? If you have made a claim against your insurance policy (i.e. you were in a car accident resulting in damage to your car that you made a claim to pay for) it is likely that your premiums will increase. Your premiums may also go up even if you haven’t made a claim. For example, if you live in, or move to, an area where an event such as a flood or a major storm has damaged property resulting in a higher than average number of insurance claims, your homeowner’s insurance premiums may go up. When it comes to life insurance changes in your age, health status, and policy coverage can also result in higher premiums.
Since your insurance coverage is unique to your personal situation, it is worthwhile discussing any unexpected premium increases with one of our insurance professionals. They can explain the reason for the increase and may be able to offer suggestions that can lower your overall costs for the protection you need.
2. My house isn’t worth what it used to be—so why doesn’t my insurance premium go down?
While it seems logical that the market value of your home should influence the cost of insuring it, in reality this is not the case. The coverage of your homeowners insurance is based on what it would take to replace your home as it is today, not what it would sell for. It is very possible that the cost to rebuild your home is more than what you could sell it for. As such, your insurance premiums may actually go up to account for the cost increases related to rebuilding your home such as the materials and labor needed to do so.
If you receive a renewal for your home owner’s insurance policy that is more than you were expecting, please give us a call and we can see if you may be eligible for additional discounts or if switching to an alternate policy may help you lower your premiums.
3. When should I add my child to my auto insurance policy? When they get their permit or when they have their license?
Most all insurance companies require all household members to be listed on the policy as household members whether they have a driver’s license or not. Now, when it comes to your young driver getting their learner’s permit, it varies by the company as to when they need to be changed from just a “household member” to a “rated driver” on the policy. Most companies will require this once the trainee gains the level of license where they are able to drive by themselves without a parent or guardian.
If you have additional questions about any of these insurance topics, or you have additional questions, let’s talk! Contact us by email or give us a call!
Ann Arbor: 734.971.1000
About the Author
Jill Bledsoe of Westland, specializes in asset protection and risk management for our personal lines customers at Benz Insurance. Jill is currently active on the program committee for Zonta of Ann Arbor/Washtenaw and survived being the oldest of five children.