In recent years, there has been a greater effort on the part of lawmakers at the state level across the country to help rein in home and auto insurance rate increases. The latest such move comes from New Jersey, where one legislator wants to make sure that filing a claim has no impact on a person’s ability to keep their home coverage costs down. These changes might come relatively soon, but in the meantime, insurance agents might want to do more on their end to make sure clients understand what they’re paying for – and why – when it comes to any coverage costs.
Earlier this month, New Jersey Assemblyman Tim Eustace, a Democrat representing Bergen and Passaic counties, introduced a bill that would stop home insurers from raising rates on consumers if they file a single claim on their property, according to a report from the New Jersey Assembly Majority Office. Recent data suggests that these increases could cost people hundreds of dollars per year, despite the fact that such financial protections are, in essence, why they have insurance in the first place.
“The whole purpose of paying for insurance is so that you will have the financial backing to make needed repairs when something goes wrong,” Eustace said. “Why should consumers be punished for filing a claim, when that is what they paid for? A single claim is not an indication of risk and should not be used as a reason to hike up prices. This bill would prevent insurance companies from hitting consumers with steep increases after filing a single claim.”
Specifically, homeowners would be allowed to file a single claim in each coverage period without worrying about their rates going up, the report said. If a company did increase a person’s premium after one such incident, they could be fined $5,000 per violation, or as much as $25,000 depending upon the circumstances. Right now, the bill is being weighed by the Assembly Financial Institutions and Insurance Committee.
When insurance agents have clients whose home insurance rates have risen, it might be wise to do a little bit of communicating as a means of educating the people as to the ins and outs of their plans. The better people understand their policies, the more likely they may be to feel confident and satisfied with the quality of their coverage. That, in turn, could also serve to keep agents’ retention rates as high as possible.