Rising Minimum H/O Deductables?

[Praeter]

Rising Minimum H/O Deductibles?

Has any companies recently raised the minimum deductible for homeowners? Here at Allstate Michigan it recently was raised to $1k. No one in our office knew about it until we were running quotes and $500/ded were rejected.

I called around and of course couldn't get an answer why it was raised or how to handle the objection if someone is adamant about having a $500 deductible. Any suggestions how to handle that type of objection and turn it into a positive?

 

[FL P&C Broker]

We have some companies in Florida that have a minimum deductible of $2500.

 

[Praeter]

We have some companies in Florida that have a minimum deductible of $2500.

Wow! I've personally only been a homeowner once, and that was seven years ago so I do not have much personal experience on the purchasing side. The majority of family and friends carry $500 and most clients I've quoted or sold prefer $500. With my inexperience, I may be short sighting this and realize if this is normal, I'll just need to work around it regularly.

 

[FL P&C Broker]

Wow! I've personally only been a homeowner once, and that was seven years ago so I do not have much personal experience on the purchasing side. The majority of family and friends carry $500 and most clients I've quoted or sold prefer $500. With my inexperience, I may be short sighting this and realize if this is normal, I'll just need to work around it regularly.

In Florida it is a completely different animal. But I would think the national average is $500 or $1000.

 

[CaptiveGuy]

Advise your clients that their home insurance is for large losses. If they file a claim for $800 the increase in their rates for the next 3-5 years is more than the paid claim most times.

I default to a $1000 deductible and advise clients with larger homes to use $1500 or $2500.

 

[Sales71]

Having a $1000 Ded is usually better for the client so they do not file small claims and mess up there insurance rate or get canceled.

 

[Praeter]

Thanks for the tips so far! I agree with you guys regarding filing small claims. That's exactly what I talk about with the deductibles. I've just found that usually with older people, they have had their $500 for so long, they refuse change.

Keep the tips coming!

 

[Biggdogg]

A lot of captive companies have gone to the $1,000 minimum, some have even gone to a percentage amount. 1% of coverage A seems to be the standard.

 

[robb01]

Our standard is $1,000, I've seen increasing deductibles becoming available though, up to $10k

 

[FL P&C Broker]

Larger deductibles will lower your loss ratio and the amount of claims. Low loss ratios lead to contingency bonuses.