We’ve all read about rising insurance costs due to world events. Why does that affect me here?
Four factors contribute to rising insurance premiums. First, the pool is depleted. Insurance works by ‘spreading the losses of a few among the many’. Insurance is a truly global industry and we are all affected by catastrophic losses. Closer to home, the Pine Lake tornado was one in a series of recent events that resulted in major claims payments. Others were September 11th, Hurricane Andrew, and the Quebec ice storm. The second factor is rising insurance premiums to insurance companies. Insurance companies also buy insurance to protect against huge losses caused by major disasters. Not only have the companies paid out huge claims as a result of events like the ones listed above, their own insurance premiums have increased dramatically. Third, for every $100 you paid insurance premiums, $108 is paid out in claims and expenses. Vehicle repair costs increase 10% each year. Others cheat but we all must pay – over 35% of all auto accident claims and 26% of personal injury claims have some
