At this point it should come as little surprise to those in the insurance industry that Massachusetts is facing higher premiums for 2016. After all, the state suffered the harshest winter on record, racking up more than 100 inches of snow – and plenty of home insurance claims – in just a few months at the start of the new year. However, the state will soon hold a hearing on whether the proposed home insurance rate hikes that are now coming across the desk of the state regulator are in any way excessive. Regardless of the hearing’s outcome, though, insurance agents may want to do a little more to talk to their clients about why costs rise when they do, and what they may be able to do to mitigate those concerns.
All the snow storms across the entire Northeast, not just Massachusetts, totaled as much as $2.4 billion in combined damages, but some consumer advocates and even lawmakers say that the proposed home insurance rate hikes in the Bay State are problematic nonetheless, according to a report from the Needham Times. Consequently, the state’s Senate Committee on Post Audit and Oversight will hold a hearing in late September to discuss the matter as part of a review of how the state’s Division of Insurance approved those changes.
“I’m keeping an open mind here, so I’m stopping short of saying any particular rate increase is excessive,” state Sen. Michael Barrett, a Democrat representing Lexington and chairman of the oversight committee, told the newspaper. “But what’s unsettling is the lack of an even fight between those who would like to maximize rate increases and those who would like to minimize them.”
How significant is it?
Some major state insurers are asking for price increases of as much as 9 percent, and while insurers paid out hundreds of millions in claims, experts are worried about the lack of transparency in the process, the report said. As a consequence of whatever negotiations took place, the average consumer – who now pays about $1,200 annually for home insurance coverage – could see their premiums rise to $1,300 annually. That may only be a little more than $8 per month, but it nonetheless constitutes cause for concern among those who worry about the total lack of pushback from the state regulator on the matter.
What can agents do in the meantime?
The fact of the matter is that most people don’t know the ins and outs of their home insurance policies and may therefore have major concerns when prices rise. But data shows that if people are given a better understanding of their coverage through regular communication with an agent or insurer, they tend to be happier with those policies on an ongoing basis. That, in turn, is likely to translate into higher rates of customer satisfaction and client retention for those agents who can best develop relationships with consumers going forward.