Pity the poor insurance companies trying to make a buck selling homeowners insurance in North Carolina. These policies tend to lose money as a group, year in and year out due to tornadoes and hurricanes and they also subject the insurance companies to the risk of large assessments to help pay for the underfunded beach plan which picks up the wind and hail exposure to the beach houses on our coast. But, if they can’t sell you a homeowners policy, then they are not likely to be able to sell you an auto insurance policy. And that’s where they make their real money. For the past decade or so, personal auto insurance has been the most profitable line of business for insurance companies doing business in North Carolina.
Now a new cost reducing solution is sneaking up on those who purchase NC homeowners insurance. The latest insurance company strategy is to apply a minimum deductible requirement to all homeowners policies. This stragegy first appeared several years ago with a few insurance companies that wanted to reduce their homeowners presence in certain higher risk areas of the state. Instead of just cancelling all of the policies in that area in a wholesale fashion, they began adding wind and hail deductibles that were based on a percentage of the total loss. So, if you have a 5% deductible and a $100,000 loss, then your total deductible will be $5000. With the more aggressive companies, these percentages went as high as 15%.
Now we are hearing that one of the largest homeowner writing insurance companies in NC is considering implementing a minimum $1000 deductible on all of its policies, both new policies and renewal policies. Now a change of this type will certainly be accompanied with some notice in the renewal and an insurance company spin that tells you how this is best for you, but the sad reality is that very few homeowners will take the time to read this notice and so they will be blissfully unaware of this new, higher deductible until after they experience a loss. Then the surprise will sting.
So, as a buyer of NC homeowners insurance, what can you do to protect yourself? Well, first of all, you should always check your renewal policies very carefully and read and understand any notices of changes to that renewal. If your insurance company has forced a higher deductible on your policy, and if that’s not what you want, then call your agent and see if they can provide you with another option. We represent dozens of companies and so far, none of ours are implementing these new, higher minimum deductibles except for a few exceptions in coastal counties.
Clinard Insurance Group is located in Winston Salem, NC and we help homeowners every day, all across North Carolina with their home and auto insurance needs. If your insurance company is ramming a new $1000 deductible down your throat and you don’t like the way that tastes, please give us a call. We will take as much time as you need to go over your home insurance in detail and help you make sure that you get the policy you want at rates that will truly surprise you (And I mean surprise in a good way, not in a higher minimum deductible way). Give us a call, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.
