Professorial types should stay out of commenting on the Insurance business. We saw how bad the Professor President did with Healthcare the past 7 years.
This shows a fundamental lack of understanding of the insurance business. I agree a homeowner should not be dropped for a single First Party claim, such as a wind loss or fallen tree.
However, if a homeowner burns his house down while cooking meth in the basement (an actual loss) he should be dropped immediately! Similarly, risks with liability hazards that remain uncorrected after a loss must be dropped or the premiums increased substantially. To fail to do so would merely result in the responsible homeowners subsidizing the rates of the homeowners that “use” their insurance. What about the guy who never has his roof replaced even though it is well past its useful life — just waiting for the wind to blow so he can file a claim? How about the person who lets their front steps rot to the point where the collapse under someone’s weight causing a bodily injury claim? Should they be allowed to keep their policy at the same premium? Wouldn’t that be rewarding irresponsible behavior?
If insurance companies, whose rates are regulated by the way, must charge the same for someone who never has a claim and someone that has two claims every three years, how is that fair? Why shouldn’t the person with the higher risk and worse loss experience pay more? Why should someone who takes care of their property and spends money to PREVENT losses as they are supposed to pay for someone who does not?
If I know my insurance company can’t drop me or raise my rates, why would I ever spend money to maintain my property? Just let the loss happen and have the insurance company pay.. and pay… and pay.
I don’t think any reasonable person would disagree with your examples (meth lab, uncorrected safety issue). The insurance law in my state would allow the insurer to cancel mid-term for either of those situations. I haven’t read the Rutgers report, but the article makes it sound like the report is talking about losing insurance for submitting one claim for a fortuitous loss.
I don’t disagree with this report if this is an actual problem. There needs to be a check and balance between the insurance carrier’s primary goal (making a profit) and the protection of consumers.
Over time, coverages are being reduced while the premiums have been going up on homeowners. These are difficult times for carriers. Nonetheless, I don’t see a big problem with “use it or lose it” with my companies. On the contrary, I am generally shocked at how many clients stay on the books despite the losses!
Re: Featured Comment – really no thinks an immediate cancellation due to the fire as a result of meth lab in basement is an example of an abusive tactic – for someone to put this forth in response to the Article is idiotic some people just need to state the obvious
Many times the increase in premium at renewal is the result of loss of the “Claim Free/Loss Free” credit that had been allowed. If you have a claim, that is going away and might result in a 10-15% increase in premium.
Professorial types should stay out of commenting on the Insurance business. We saw how bad the Professor President did with Healthcare the past 7 years.
This shows a fundamental lack of understanding of the insurance business. I agree a homeowner should not be dropped for a single First Party claim, such as a wind loss or fallen tree.
However, if a homeowner burns his house down while cooking meth in the basement (an actual loss) he should be dropped immediately! Similarly, risks with liability hazards that remain uncorrected after a loss must be dropped or the premiums increased substantially. To fail to do so would merely result in the responsible homeowners subsidizing the rates of the homeowners that “use” their insurance. What about the guy who never has his roof replaced even though it is well past its useful life — just waiting for the wind to blow so he can file a claim? How about the person who lets their front steps rot to the point where the collapse under someone’s weight causing a bodily injury claim? Should they be allowed to keep their policy at the same premium? Wouldn’t that be rewarding irresponsible behavior?
If insurance companies, whose rates are regulated by the way, must charge the same for someone who never has a claim and someone that has two claims every three years, how is that fair? Why shouldn’t the person with the higher risk and worse loss experience pay more? Why should someone who takes care of their property and spends money to PREVENT losses as they are supposed to pay for someone who does not?
If I know my insurance company can’t drop me or raise my rates, why would I ever spend money to maintain my property? Just let the loss happen and have the insurance company pay.. and pay… and pay.
I don’t think any reasonable person would disagree with your examples (meth lab, uncorrected safety issue). The insurance law in my state would allow the insurer to cancel mid-term for either of those situations. I haven’t read the Rutgers report, but the article makes it sound like the report is talking about losing insurance for submitting one claim for a fortuitous loss.
I don’t disagree with this report if this is an actual problem. There needs to be a check and balance between the insurance carrier’s primary goal (making a profit) and the protection of consumers.
Over time, coverages are being reduced while the premiums have been going up on homeowners. These are difficult times for carriers. Nonetheless, I don’t see a big problem with “use it or lose it” with my companies. On the contrary, I am generally shocked at how many clients stay on the books despite the losses!
Re: Featured Comment – really no thinks an immediate cancellation due to the fire as a result of meth lab in basement is an example of an abusive tactic – for someone to put this forth in response to the Article is idiotic some people just need to state the obvious
Many times the increase in premium at renewal is the result of loss of the “Claim Free/Loss Free” credit that had been allowed. If you have a claim, that is going away and might result in a 10-15% increase in premium.