Homeowners By Peril Rating

following....

Erie just rolled this out and I think its confusing to the client and a possible E&O issue... unless you have someone who really wants a customized policy.
 
Haven't they always done this?
Not sure I understand the question.

Are you saying they will list the perils on a menu and I get to order fire, theft, but I'll skip vandalism?

Isn't this in essence the same as the difference between a DP-1, DP-3, HO-5, etc type of thing?

Dan
 
No, they do it with different deductibles for various perils.
I forget which ones. Water is one, theft is another.
So you could have $100 ded for theft, $2000 water, etc etc etc....
 
Not sure. I guess Auto owners rolled it out in GA already and said its done very well for making them competitive. They are rolling it out here in MN jan 1. Should be able to quote it in a couple weeks
 
Hmm...interesting. I can see "how" that can help...but I can also hear the scum bag insured's now ...

"Wait a minute? If I have a $100 deductible for explosion why would I have a $2,500 deductible for water?" and then..... "I thought I had a $100 deductible for everything?" blah blah blah agent's fault all day long.
 
Double edged sword for sure. But aren't we already facing that on a smaller scale with hurricane deductibles?

I guess I could see it helping to get a HO policy priced where you want it, but on the other hand I'm assuming the premium changes would have to be relatively minor. Maybe not?
 
Homeowners rating by peril is a rating structure that results rates more closely aligned with the risk. For example, in the old world there would be a rating factor for age of roof that alters all premium. In reality age of roof is tied to wind, hail, water and fire (in the west). Rating by peril makes only a portion of the premium vary by that factor.

The other key benefit of that type of program is that the rating plan usually gets overhauled and all the latest and greatest rating factors usually come with it. Usually there is not a connection to deductibles, and is usually behind the scenes to customers. Hope this helps.
 
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