Rising insurance rates always trouble us, especially if we are locked into a set income. Most of us can live with inflationary increases, but those large increases really make us burn. I tend to feel an increase of six percent to eight percent a year is acceptable (am I being too generous?). If the increase is more than that, we should consider looking for another company.
But, even if the inflationary increases are moderate, why do we sometimes see large increases? There are several reasons. If you sign up with a company just before they have a rate increase, you won’t feel that rate increase for a year. You are locked in for one year to the initial premium. If the company has two rate increases, one a few weeks after you sign up and another a few weeks before you have been on the policy for a year, you will get two increases on the anniversary date of your policy. Then, if you move into a new age rate bracket during that year, you will get an increase from that too. So you could possibly get two 8 percent increases and an age increase of 4 percent and end up with an increase of 20 percent. On a policy of $300 that would increase your premium to $360, and that would be only if the increases were limited to 8 percent plus 8 percent plus 4 percent.
Whatever the case, please contact us when you have questions about premium increases. We will try to get a specific calculation from the company, and if you feel their explanation is unacceptable, then we would like to give you quotes on various other companies to see if we can find a comparable plan at better rates.
Another way to beat increased rates is to go for a higher deductible. Some people start with a low deductible, and every couple of years they move up to a higher deductible. Thus, they keep their rates stable. I, for one, understand the problem of high rates. I’m a relatively healthy man in my early 60s, and even though I have insurance with a $2,000 deductible, I’m still paying over $200 a month. I wish I could find a plan that would give me comparable coverage with a lower rate, but so far I have not been successful.
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