Personal Lines Rate Increases

[dmetzger]

I work for an independent agency and we remarket anything that has gone up more than 10%. If we are able to reduce the premium, we advise the insured and send them the quote.

My question is more about what to do when we rate it and we can't save them money. Would you rather know I did review your account and can't save you money? Or should I not say anything, as perhaps you didn't notice the increase and I bring it to your attention, will you shop it around now.

 

[djs]

What caused the rate increase? If its a cause and effect, then just explain that. Hey Mr. Smith, due to your auto claim last year we noticed a rise in your premium on this renewal. We compared with other carriers and found you are still on the best plan for your current situation. You will see the renewal in the mail shortly.

If its just because (and it happens)
Hey Mr. Smith, as you may have heard, insurance premiums have gone up this year overall. Because of this, we took the time to shop your coverage to make sure you have the best plan for you and continuing with your current coverage is the best option. You will see the renewal come soon. At that time, if you have questions, please contact us.

Let them know you are working for them and you did the comparison shopping. If the rate increase is larger, you might ask them if they would like to review additional options, such as deductible changes, coverage changes, additional discounts, whatever.

Dan

 

[TwoLabs]

^^ What he said.

I think it's always a crap shoot as to whether it will help or hurt you to notify in case you can't do anything better. I'd lean towards letting them know because the type of clients you want to keep will say to themselves, "That's great. They've already shopped it for me, so I don't have to do anything." The ones you don't necessarily want to keep will think, "Wow, it DID jump didn't it? I guess this means I should shop it."

 

[indienoise]

Plus, that insured is going to notice one way or the other. May as well let them know you're an advocate for them.
If they're the type to call geico or state farm after an increase, they're gonna do it whether you send them that letter or not.

 

[KenP]

Absolutely agree with everything here. The few you might lose because you "tipped them off" (though they probably would notice on their own anyway) you probably don't want to keep. They'll inevitably shop anyway and it is what it is.

And for every few you lose, you'll likely have many many more that appreciate the service, trust you and take your word that there's nothing better, and can have some closure and acceptance before they bend over and pay the bill.


Only thing you might want to avoid: If you can't reduce premium, AND it's paid through escrow, don't bother to mention it. The increases don't feel as bad month-to-month and they may just assume it has to do with their mortgage as opposed to insurance. Those ones may never have noticed until you tipped them off.

 

[Rick Deckard]

Absolutely agree with everything here. The few you might lose because you "tipped them off" (though they probably would notice on their own anyway) you probably don't want to keep. They'll inevitably shop anyway and it is what it is.

And for every few you lose, you'll likely have many many more that appreciate the service, trust you and take your word that there's nothing better, and can have some closure and acceptance before they bend over and pay the bill.


Only thing you might want to avoid: If you can't reduce premium, AND it's paid through escrow, don't bother to mention it. The increases don't feel as bad month-to-month and they may just assume it has to do with their mortgage as opposed to insurance. Those ones may never have noticed until you tipped them off.

Hate to agree but this is good. A lot of folks might not care much if their mortgage rises from $1800 to $1840 but that's an increase of about $500 to the insurance if that is in fact the reason for their increase and not tax related.

I also agree with being proactive, it will help you and also keep your moral compass pointing North and your watch fixed at Noon instead of 11:45

 

[insurance1822]

Once your book gets large enough, it's not practical to review all renewals unless it's 25%+ and even then, many will eat it. You will lose PIF but your premium will grow as those rate increases get absorbed. My Encompass PIF retains at 88% but my premium retention is 110%.

And so far as your moral compass? Switching carriers regularly will continue to erode their insurance scoring and if/when they eventually have an accident or claim & then get HAMMERED on rates...it may nip them in the butt.

Write w/ regionals who underwrite harder but only take 1-2% per year & it's a non issue. Write w/ the large nationals (who are also cutting commissions..) and you're going to be dealing with remarkets way more.

#goregional