Jeffrey B. Campbell, State Farm Insurance
by Kevin Fritz
If the rates have increased recently on your auto and/or home insurance policies – through no fault of your own – you’re not alone. The industry is undergoing a correction amidst some insurance companies pulling out of Florida, unprecedented litigation (with 76 percent of all insurance litigation nationwide happening in Florida), and the exponential rise in the cost of claims over the past two years.
These increases will not be forever, but at present, that’s the reality. Fortunately, there are a few ways to mitigate these insurance increases – and several of those tips are outlined in the accompanying sidebar.
“The struggle is real,” notes Jeffrey B. Campbell, owner/agent of State Farm Insurance in Oviedo.
While there are many reasons for rate increases, it comes down to the cost of doing business, just like with any other industry. Costs to rebuild homes have dramatically multiplied because of supply chain issues still left over from the pandemic as well as the cost of labor. Car repairs are in the same boat, with parts and labor being much more expensive these days. The rising cost of medicine plays a major role, as well. Bodily injury costs from auto accident claims keep growing as accidents and fatalities have risen post-Covid.
Not only are these factors increasing our insurance rates, some people are being shut out or scrutinized when shopping for home or auto insurance.
“Consumers want to know where to find insurance,” says Jeffrey. “They are looking for both affordability and availability.”
When insurance companies leave the state, they leave a lot of people looking for insurance and under deadline pressure to obtain it. However, insurance availability can be a difficult thing to find.
“We have to be restrictive, so we don’t end up folding,” explains Jeffrey. “We are responsible to the people we already have and must have money to pay claims. But, we are always looking to see what we can do to fix the situation.”
The cost of claims in an inflationary market makes it hard not to be restrictive. Sometimes it takes just one event to cause insurance carriers to fold or stop taking on new policies to remain solvent. Hurricane Andrew was a turning point for both insurance companies and the state of Florida. Indeed, the 1992 Category 5 storm cost State Farm more than all of the profits made from every policy sold in Florida since State Farm Fire and Casualty began selling policies in the Sunshine State.
Insurance agents are not the ones who decide to implement rate increases or drop policies, Jeffrey explains. When a company such as State Farm sees trends over time, it anticipates more of the same and then has tough decisions to make.
Jeffrey says, “This is a major challenge for consumers, for agents, and for the companies.”
Tips to Navigate an Inflationary Insurance Market
While rate increases are the norm for now, Jeffrey B. Campbell with State Farm Insurance suggests this game plan to help get through the current market situation.
Consider higher deductibles on your policy to save money on premium payments.
Vehicle telematic programs, which monitor safe driving, can lead to discounts on your auto insurance.
Review your policy with your agent for additional discounts, which could include a marriage discount or a multi-line reduction.
Never let your policy lapse or cancel. It is not as easy as in the past to get reinstated and you may have to pay your premium in full before reinstatement.
Stay loyal to your carrier. Some companies won’t accept you as a customer if you have less than two years with another carrier. Tenure matters with insurance companies.
Be a safe driver and follow the laws. Tickets add to your rate and can remain on file for three to five years.
Absorb small claims when possible and save your coverage for catastrophic losses. Frequency of claims matters with your carrier.