I Have No Insurance Claims, Why Has My Premium Increased?

Q: I have had no claims or just a few small claims, and my MA Garage Insurance premium has increased recently. Why?

A: This is a great question. Insurance companies, derive their income primarily from two sources; 1) premium charged to insureds and 2) investment income. Insurance companies use the premiums paid to invest in the marketplace to supplement their revenues. In prior years, these investments could result in returns from 3-10% percent. However, in the past few years, investment income has plummeted and this decrease in return has not only shown itself in your 401k returns, but has hit insurance companies as well.

With investment income so very low, insurance companies have faced one of two choices, or a combination of both. 1) Increase the policyholder’s premium and/or 2) implement very strict underwriting (selection) criteria in hopes of reducing losses. Around most of the United States, insureds report that their annual premiums have risen even if they’ve had no losses.

To combat these rising premiums an insured must demonstrate to the insurance company that they have developed adequate safety policies, trained employees, and monitored the results of these efforts with an eye toward fixing any issues that continue or develop. In fact, many insurance companies insists on certain loss prevention or risk management techniques as a condition of writing and renewing garage insurance in MA.

That’s where an independent agent like Wolpert Insurance can help. We specialize in auto body and repair facilities and our agents have training techniques and systems that can get you safety program up and running in no time.

Visit us today at www.wolpert.com.

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Published in: on August 25, 2010 at 8:32 pm  Leave a Comment  

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