We’re here to talk about things to help you understand what is going on in the world of insurance.

We’re in November right now, Snow College Football is ranked in the top four. Manti Football is in the final four of their tournament, a game this weekend. This is a great time of year for the community with the local sports.

Yeah, it’s a fun time. I’m going to make the trip with Garry Chidester tomorrow to Kansas for that game there.
I’m excited to see Manti, Morgan is tough, so I’m looking forward to seeing how that turns out.
But with Snow being in the top four is big, with two losses. But I think this team from Garden City is the most talented team they’ll be facing all year. Their record underrates them. This team could easily knock off Snow if they’re not careful. So it’ll be a good game, fun to watch.

That game will be on KMTI this Saturday (November 4th) at 9:33 MT, an early game.

The insurance world right now, especially for home and auto , is in a weird place. The insurance companies have gone into what is called a hard market, which means they are tightening up on everything on their requirements, they are very picky on who they take new, and, as much as I hate to say it, your rates are going to go up over the next year. And that’s hard to swallow, but that’s what’s happening.

You know, across the board, and it doesn’t matter if it’s Farm Bureau, American Family, State Farm, Allstate, it doesn’t matter, but what we’re hearing is anywhere between 20 and 30% increase across the board. If you get it less than that, be grateful, because that’s what we’re being told, industry-wide, that it will all be going up about 20-30%

This is the hardest one, I really do have empathy for this. In the past, we’ve always talked about how your actions affect your rates. And in this case, because it is so unique, this isn’t the case. This is a hard one because some of the individuals out here are not warranting the increase.

Now this is an example, it’s not factual, don’t take me to the insurance department, I’m just making these numbers up. But it’s kind of what we’re seeing as far as the trend standpoint. Let’s say you have 1,000 single men here in Manti or Ephraim. And the Insurance company can calculate based on averages and statistics how much they have to charge each of those individuals to cover the cost of an average claim.

Let’s say on average, out of those 1,000 people, 10 of them have a claim. Those claims average $5,000 a piece, adding up to $50,000. So now the insurance company can say okay, to cover that cost, we take the $50,000 divide it by 1,000 people, we need to charge everyone $500 a year to break even, and then pray that the claims are less, so that we make a profit.

What has happened since inflation and COVID-19 and all of that is that those same 10 claims are now costing $750 on average. So now, they rated for $50,000 to cover, but the claims are costing $75,000. So across the board now, we need to charge everyone $750 to get to that break-even point.
That’s kind of what’s happening. The claims aren’t going up, not the number of claims, it’s the cost per claim that has gone up. And this is due to whatever reason, material costs are up, labor costs are up. It doesn’t matter if it’s a body shop, engine shop, home build, or restoration company, inflation has caused all of their costs to go up, and they turn it back onto the consumer. The insurance companies are paying more, so they have to readjust.

Because of that, they are basically taking one of two stances; one is where if you’ve had too many claims, we’re nonrenewing the policy at the renewal or we’re raising up the rates to compensate. They’re trying to mitigate the amount of loss as much as they can, the best they can, and they’re trying to do that in a couple of different ways.

It’s hard for the consumer, it truly is, because rates are going up, there’s no ifs, and, or buts about it. And it doesn’t matter if you go from Farm Bureau to American Family. The rates may be different, but they are all going up.

There are a couple of things that you could do. You can always increase your deductibles to self-insure some of the small things.

Say that you’re in the Walmart parking lot and someone doors your car and busts the mirror off. If you can’t find the person who did it, don’t file the claim on your insurance for $500, just pay it. Because you are going to see that rate increase reflect on your premium because of the claim surcharges. If you have too many claims and say they are non-renew, and because many insurance companies are tightening up, a new company may not want you because of your claim history.

The last thing I want to promote is “don’t file a claim” because that’s why we pay for insurance. But I think we need to go into the mindset of filing the claim that I can’t afford to pay for out of my own pocket. The little stuff, the $1,000 water hear leak that leaks on the baseboard, bite the bullet and pay for it yourself, don’t file those claims. Because it’s just going to come back to hurt over the next couple of years. And that’s sad to say, but that is the truth.

And we’re here to help. Call your agent, and ask if you should file it or not, and they will be more than happy to guide you through it. We want you to be taken care of, but we also know that if you get non-renewed it’s really hard to find a new market. Then you’re going to surplus which is going to triple your rates.
I’ve seen a home with a couple of water losses that the premium went from $700 a year to $3,200 a year because they fall within a market that will take you when no one else wants you, but will charge a crazy amount to take you. That’s where we’re at.

We just opened up a new branding look for our agency, so go check it out anyway if you’re interested.
We’re excited for the future, but it is a hard, weird market right now. So just be careful, talk to your agent.
But come to our website, riskman1.com , there’s ways you can get quotes, you can get contact info for any of our people.

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