Anyone Have a Company Whose Rates Are Too Low?

[benwrigh]

As we all know, homeowners insurance has become more and more expensive over the last few years. I am in Indiana and we have had tremendous weather related losses.

There is a company that we have been working with for around twenty years at the agency. The rates are simply too low. For example, last week I quoted a homeowners policy with the dwelling covered at around $175,000, $1000 deductible, personal property replacement, and water back up. She was receiving a auto/home discount and security system discount. Annual premium was $357. Our next lowest rate was around $700.

And they wonder why our loss ratio is so high...

I was curious if anyone else deals with a company like this.

 

[USF3983]

I've seen it happen with auto companies here in Florida. The scary part was knowing that we'd probably be needing to requote most of them when the company realizes they need to increase their rates. It's a good foot in the door for new clients though.

 

[Guest]

As we all know, homeowners insurance has become more and more expensive over the last few years. I am in Indiana and we have had tremendous weather related losses.

There is a company that we have been working with for around twenty years at the agency. The rates are simply too low. For example, last week I quoted a homeowners policy with the dwelling covered at around $175,000, $1000 deductible, personal property replacement, and water back up. She was receiving a auto/home discount and security system discount. Annual premium was $357. Our next lowest rate was around $700.

And they wonder why our loss ratio is so high...

I was curious if anyone else deals with a company like this.

In Oklahoma we had many companies who were not rating correctly and they have been hammered the last few years with claims. Travelers entered the market and 'bought' a lot of business with rates that were insanely low. Two years later and they are now the highest priced company I quote.

Farm Bureau also has had a lot of problems in Oklahoma the last few years with the rating on their Homeowner's policies. It has put them into a very tough spot because they are having some big financial problems.

I don't run up against the insanely low prices here anymore because of the extreme losses we've had with HO policies. All companies have had to raise their rates and are starting to rate much more correctly. However, when I do find one that is out of line I tell the client that I'll place them with that company, but they can expect a large rate increase on their next renewal and we'll need to shop it again. So far, that has happened every single time.

It doesn't make sense to me. If every company in Oklahoma rates a certain type of risk at $1K a year, but Travelers rates it at $500, how do they think they are going to be profitable when no one else is with that $1K rate?

 

[Soaringagent]

It happened with Travelers in CA too.. there had really low rates a few years ago for stand alone home

 

[benwrigh]

Another company we contracted with about 3 years ago had some crazy rates too. In the past 2 years, if i remember correctly, they have had 2 major rate increases of at least 10% and they are getting ready for another with an average of 20%. Also, auto support required and no homes over 35 years old, which almost eliminates our whole county.