Do you get the feeling that every time you get a letter from an Insurer, it’s to tell you about more premium increases?
That letter might look like it was hammered out on an old typewriter. It probably came with some brochure showing a family walking hand-in-hand on the beach all the while happy about an increase.
Why do we get increases? And why do insurers insist on pictures of families flying kites and having such a fun time with their insurance?
Only one of these things needs to be a mystery.
Premium increases can happen for many reasons. The first reason can just be how you and your adviser chose to structure the premium at the start.
If your premium is increasing a bit each year, then your premium might be what is called “rate for age!”. This means as you age, the premium rises to reflect the risk of someone at your age experiencing the event you have insured for. An example is death. A young male in their early 20’s has a higher rate of dying in a car accident than a 50-year-old male generally. But a 75-year-old male has a greater chance of dying through illness (Cancer, Heart Disease or Stroke).
Also, your original gender affects the premium. Generally, women live longer than men, so women generally have lower premiums than men of equal age.
Another factor may be how many claims an insurer sees among their clients with that same policy. For example, if the insurer has had a large run on Medical Insurance claims, they may apply a “general” increase across their whole insured population.
These explanations may leave you thinking, “Well, that’s fine, but I’m over it. I feel like chucking the lot in!”
If that’s you, call us! You have options available depending on what you have covered.
For example, you could consider what is called “level” premium where your premium is fixed for a period. You could look at a cover that has choices on the excess, which can help with premiums. Another option could be a review of your covers. You may find you have more cover now than you need. We can lower your cover and lower your premium so both are a better fit.
There are lots of things we can look at to help you with premiums. It’s all about making sure you have the right fit for your situation. Call us and let’s set a time to chat: 09 307 9300 or email info@imak.co.nz.
