Home insurance quotes due to rise in 2012
February 7th, 2012 | 
Author: Since 1990, there’s been a steady trend for the nonprofit insurers to convert into for-profit. The industry argues this makes their members more efficient. In fact, it only makes them more efficient in extracting money from the insured. As if this is not bad enough, many of America’s top insurers also sell insurance in foreign countries. This is one of the byproducts of globalization. It seems the efficiency of insurers can be felt all round the world as they pursue profit wherever it can be found. Well, this makes 2011 a year for us all to remember. We had earthquakes in New Zealand and Japan where the damage was made rather worse by the arrival of a tsunami. Back home, we had a terrible winter with major storms. Then came the tornado season and hurricanes brought flooding to Virginia and other unexpected places. This combination of extraordinary seismic activity and record-breaking bad weather has produced a disaster in company profits. Insurance companies are in shock as the volume of claims becomes apparent. In America alone, the insurers will be paying out more than in any other year since records began The losses are almost $18 billion in the first six months of 2011 as against $13.5 billion for all of 2010. It’s going to be a challenge for them to recover from the estimated loss of $32 billion for the full year.
Looking at the geography of America, some companies are less exposed because either they are based in states experiencing fewer disasters or they have fewer insured in states where the losses have been highest. All insurers have therefore been taking determined steps to reduce their exposure to risk. They have begun by reviewing the terms of their policies to impose more limitations and exclusions. They are also refusing cover for flooding and water damage where the volume of claims has risen faster. Deductibles are rising, and then come the premium rates. According to the Insurance Information Institute, the average rate annual premium for homeowners is about $850. This will almost certainly rise in 2012. This may not sound fair but, with insurers operating in many different states (and selling insurance to foreign countries), the risk of losses is spread out with premiums rising for everyone.
Once the majority of insurers changed their status, they focussed on the need for profit. This means reducing the amount paid out and maximizing the amount paid as salaries and benefits to the employees. Stockholders take the rest. Since the majority of insurers act in this way, how can you protect yourself? First, you must look very carefully at the small print. Remember cheap home insurance is cheap for a reason, i.e. it offers only limited cover. Second, once you have found a good value policy, don’t make small claims. Even if you have lost more than the deductible, be warned. Insurers are canceling policyholders who make more than two claims in a relatively short period of time. Keep the policy for a major loss. Remember your claims history is shared among all insurers so, if you do claim, hope to avoid a nonrenewal notice in the mail. You might find it difficult to find a replacement home insurance policy.
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