Rising Minimum H/O Deductables?

[richas27]

I'm with Nationwide Insurance and Financial Services and we have a minimum $1,000 deductible. I have found that letting the clients know that keeping a higher deductible and assuming more of the risk lowers the premium..

 

[NCAgent]

most of my carriers are doing 1k here. A couple are staying at 500 though, or fixed deductibles for wind and hail when most companies do a percentage.

The reason being is the insurance companies are trying to reduce claims and lower costs for the claims as well. Loss ratios have been TERRIBLE so that is part of it.

Also, look at inflation. $500 years ago is probably what a $1,000 is now or will be in a few years from now. Or at least similar to a $750.

Everything else is going up, why not deductibles?

 

[Praeter]

most of my carriers are doing 1k here. A couple are staying at 500 though, or fixed deductibles for wind and hail when most companies do a percentage.

The reason being is the insurance companies are trying to reduce claims and lower costs for the claims as well. Loss ratios have been TERRIBLE so that is part of it.

Also, look at inflation. $500 years ago is probably what a $1,000 is now or will be in a few years from now. Or at least similar to a $750.

Everything else is going up, why not deductibles?

Great point and comparison about inflation as well! I didn't consider that. Great posts here. Thanks everyone!

 

[OhioIA]

Travelers minimum deductible in Ohio is $1500 for new policies and they are raising their deductibles on all of their renewals to $1000.

 

[djs]

Why would an insurance company not offer a $500 deductible for those who want it?

Its not like you get it for free, they charge for this.

Dan

 

[Biggdogg]

The theory with the higher deductible is it discourages policyholders from filing small claims. Belief is that people rely too much on the insurance for small things, which the policies aren't designed to handle.

 

[NCAgent]

I think it also depends on the area, too.

Some states have HORRID loss ratios (like Georgia and NC) so they are a lot more likely to discourage lower deductibles. I would imagine places further out west would be more lenient to the 500 deductibles or even 250!

 

[djs]

I understand the theory and I don't sell low homeowner deductibles, but at the same time, why not sell a $500 ded?

Does a $2000 fence claim really destroy a carriers loss ratios? No, not a prayer. Especially since a lot of individuals won't file the claim anyway.

On a $100K loss, does the difference between a $500 ded and a $1K or $2K deductible really have much impact on the carrier? No, not really.

My point is, why not offer it, even if at a much higher premium. Some people want it. Good for them.

Dan

 

[FullAuto]

Around here everything has always been $1000 and 1% coverage A for wind/hail claims. Most of our claims are hail related. One big captive just changed this month to 0.5% or 1% and is no longer offering a set $1000 deductible for non-wind/hail.

 

[Soaringagent]

Agree, home insurance isn't a maintenance policy. It is more for major losses.