I have an a 11 unit apartment complex. My premium went up $285.93 in one year, I asked my agent to show me a formula on how Famers came up with this, he said he does not have this information. Don't I have a legal right to know?
P.S. Mbrcatz17 need not reply.
2007-06-05 02:56:12 · 8 answers · asked by Kevin K. 1 in Business & Finance ➔ Insurance
No, you don't. You have a legal right to see the rates on file with the insurance department in your state. And you have the right to take your business elsewhere.
Sorry you don't like the answer.
2007-06-05 05:33:33 · answer #1 · answered by Anonymous 7 · 0⤊ 1⤋
You own an 11 unit apartment complex? Good for you. I would think your premium would increase every year to some degree. Most companies put an inflation guard endorsement on these types of policies to keep up with the rising costs of reconstruction. Did you compare your declarations from last year to your renewal decs? If the building coverage has increased that is why your premium has increased as well.
Or Farmer's may have raised its rates. Your agent can request the reason for the increase from the company. If you don't like the answers your agent is giving you, shop around.
2007-06-05 10:18:14 · answer #2 · answered by van_at_lincoln 3 · 0⤊ 0⤋
There are often general rate increases - my home insurance goes up essentially every year.
On an 11 unit apartment complex, that doesn't sound like a huge increase - is about $26 per unit.
Your agent should have been able to tell you whether there was a general increase - but would NOT be likely to have the full info on exactly how your premium is calculated, and it sounds like that is what you were asking.
2007-06-05 10:29:13 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
It's not a secret, each year insurance companies have to submit their rating procedures to every state's Insurance Commissioner. This helps to protect costumers from bias and discrimination.
The question is, can YOU access this information? I'm not sure, but you can find out by contacting your state's Insurance Commissioner.
By the way, it sounds like it's just a rate increase. If you think you're paying too much, call some other agents. It's much easier than digging through the rating procedures for an apartment complex.
2007-06-05 12:12:47 · answer #4 · answered by Nate W 5 · 0⤊ 0⤋
The formula for how rates are calculated is a trade secret for each company - the only people who know the formula are the actuaries for the company. The agent does not know it. Your agent should be able give you an idea of what caused the increase (across the board increase, change in territory classification, standard cost of inflation, etc), but you do not have the right to know the formula.
2007-06-05 14:37:40 · answer #5 · answered by § ☼ JLG ☼ § 4 · 0⤊ 0⤋
The "formula" you're referring to is called Cost of Insurance (COI). It's a "secret" formula that differs with each insurance company. You do not have the legal right to know because the company isn't required to release that information.
Example: You can't call Coke or Pepsi and get their cola formula, it's a trade secret. Same thing with COI for insurance companies.
The company would have reason to increase your premium if you had claims in the past year. Also, they can increase your premium if they also increase by the same rate the premiums of all clients with the same insurance as you have.
So what the above answers say is correct, that your agent should be able to tell you what the rate increase was due to but he won't be able to justify the amount in a formula for you.
If you don't want to pay it, get quotes elsewhere. You can get lots of free quotes online with some basic information about the property.
Also, I don't know what your premium was before, but one thing you might want to do is calculate the percentage increase because it may just be increasing to keep pace with inflation. Just something to think about.
2007-06-05 12:01:44 · answer #6 · answered by Matt and Diane 2 · 0⤊ 2⤋
An insurer's property rates and how they determined are proprietary information and are not available to the general public. This is to prevent competitors accessing this information.
Did you compare the renewal terms to the previous year's terms? Did the coverages increase? That could explain the rate increase. If not then you are free to shop around and find a better rate.
2007-06-05 12:07:17 · answer #7 · answered by Gambit 7 · 0⤊ 0⤋
your agent can't explain an almost $300 increase in your premuim? Maybe you should look around for a new insurance agent.
Quotes are free, you know ... look around, shop and compare.
2007-06-05 10:00:52 · answer #8 · answered by georgiagrits1 5 · 0⤊ 1⤋