Landlord Protection for Rental Homes
September 10, 2019
Small Business Insurance – Business Owners Policy
November 5, 2019
Pricing Factors used by Actuaries to produce rates
Homeowners insurance rates are not individual in nature but based on a large segment of similar risk; since Insurance is defined as ‘Shared Risk’, all property owners place premium in the system which is guarded by a regulated and audited insurance carrier to be paid out when a covered claim is filed.
Actuarial firms are accounting companies with a refined specialization of risk forecasting and data management; when contracted, they work with insurance companies utilizing both past claims data and future forecasting models to calculate the monetary funds necessary to satisfy future claims.
In addition to the base rates calculated for a segment of insurable homes, there are some individual factors which may generate surcharges or credits; namely Credit Worthiness (not all States), Security System Credits, Fire Sprinkler Credits, Claims Surcharges, Paid in Full Credits, Age of Insured Credits, Type of Roof Credits/Surcharges, Age of Utility Systems Credits/Surcharges etc…
All insurance carriers have different discounts and surcharges to calculate the total premium rate for each specific home. One of the greatest discount factors would be the Policy Deductible; the highest available deductible will generate the lowest possible premium.
Insurance premiums are constantly adjusted to continually reflect the expected cost of claims. Policyholders will see premium increase while others may see premium decrease or stay the same; the goal is simply to collect enough premium to satisfy all claims. The United States is a very vast geographic area; risks vary vastly from one region to another. Insurance risks may include Fire, Smoke, Wind, Water Damage, Theft, Liability, Flood, Earthquake and many more perils.
Fraud is a great concern to each and every carrier; it is essential that we stay on top of fraud and report any suspicion of such activity. Fraudulent claims will no doubt impact premium; those that engage in fraudulent claim activity are actively working against all other property owners paying into the same insurance pool.
