The U.S.commercial automobile insurance segment’s underwriting losses deepened to $4.0 billion in 2019, the segment’s worst loss in 10 years and a continuation of a decade-long trend of worsening underwriting results, according to a new AM Best report.
Indeed, the U.S. commercial automobile insurance line of business has not generated a combined ratio under 100 since 2010, said the report, titled, “U.S. Commercial Auto Writers: Profitability Remains Elusive.” (Combined ratios above 100% indicate an underwriting loss).
The segment’s combined ratio deteriorated by 1.4 percentage points in 2019 to 109.4, driven by a nearly 2.0 percentage-point increase in incurred losses and loss adjustment expense (LAE) ratio, the report continued.
AM Best confirmed that calendar year 2019 marked the eighth consecutive year in which the commercial auto line’s combined ratio was materially higher than that of either the commercial lines or the P/C industry in its entirety.
Despite double-digit, year-over-year increases in earned premiums, the growth in incurred losses and LAE has outpaced earned premium growth, the report said, noting that LAE continues to grow as claims are going through costlier litigation from social inflation and instances of litigation financing.
However, the COVID-19 pandemic may give commercial automobile writers some breathing space from the segment’s high frequency and severity levels, the report said.
“Reduced road traffic from shelter-in-place requirements has resulted in fewer automobile accidents; however, although accident frequency may decline, severity potentially could rise because of vehicles colliding at higher speeds,” it added.
While ride-share claims may decline, claims from meal or grocery delivery services could increase as a result of the lockdown, AM Best added.
The report said that auto insurers have made concerted efforts improve price adequacy, pushing for rate increases for the past several years. “Increasingly aggressive rate actions continued through 2019, with the first double-digit increase in premiums of 10.5% across all accounts in the fourth quarter.”
For the line to return to underwriting profits, AM Best said, “companies will need to do a better job with their initial assessments of costs per claim, given that automobile repair costs continue to rise, as well as severity, owing to more frequent attorney involvement in claims.”
Insurers also must embrace technologies like telematics and enhance their rate, underwriting and claims-settling practices, said the ratings agency. (Editor’s note: telematics help improve driver safety).
As a result of these trends, AM Best maintains a negative market segment outlook on the commercial automobile insurance segment.
Source: AM Best

https://www.insurancejournal.com/news/national/2020/06/30/573912.htm

A frequent question we get from Georgia homeowners is: What deductible do you recommend? 

The answer to this question isn't going to be the same for every Georgia homeowner or every home insurance policy. However, becoming educated on the different types of deductibles and their effect on your home insurance will help you make the best decision for you and your family. 

What Type of Deductibles Are Available?

For home insurance in Georgia, there are typically 2 types of deductibles to choose from: a percentage-based deductible or a flat deductible. 

A percentage-based deductible is calculated by a specific percentage of your dwelling coverage. You can typically choose 1/2%, 1%, 2%.. all the way up to 5%. This means that if your home's dwelling coverage is $500,000 and you have a 1% deductible, your current deductible is $5,000. 

The main advantage to carrying a percentage-based deductible is a discounted premium. Since your share of the insurance will never change, the insurance company will typically give you a cheaper premium. In the $500,000 to 1% deductible example above, this would be less expensive than carrying a flat $5,000 deductible. Why? Because over time, the coverages on your policy will increase to keep up with inflation. For instance, a home covered for $500,000 today may be covered for $600,000 10 years down the road. Someone with a flat deductible will still only be responsible for $5,000 while someone with a percentage-based deductible would be responsible for the first $6,000 in damages. 

The main disadvantage of carrying a percentage-based deductible is that your deductible will increase over time and it can lead to major surprises when it comes time to file a claim. I have seen in the past where someone files a claim thinking they have a $2,500 deductible and it ends up being closer to $4,000, which severely impacts what the insured receives as a pay out on their policy. This is the main reason that we tend to steer away from these deductibles. The savings on premium is typically very minimal and not worth it in the long run.

The main advantage of carrying a flat deductible is that you will always have the same share of insurance, unless you decide to make changes down the road. If you have a $1,000 deductible today, you'll still have that in 10 years. This makes understanding your policy so much easier in my opinion and leads to much happier clients when it is time to file a claim.

General/All Peril Deductible vs Wind/Hail Deductible

Another thing to be aware of when it comes to choosing your deductible for your home insurance policy in Georgia is that many companies have 2 separate deductibles. One that applies for weather damage (Wind/Hail) and another that applies to all other causes of loss (All Peril or General). 

Due to the surge in roof claims in Georgia over the past 10 years, we're starting to see many policies in the marketplace that are written with significantly higher wind/hail deductibles. This is typically done as a cost-saving mechanism for most Georgia homeowners, although some homeowners near the coast will be forced to take a higher deductible for wind/hail due to the high winds in their area. 

Unless your carrier requires you to carry a larger deductible for wind/hail due to your location, we always recommend keeping it the same as your all peril/general deductible. The savings on your premium is typically very minimal and not worth it, in my opinion. Also, the easier your policy is to understand, the less surprises you'll have when it comes time to file a claim. 

So What Deductible Is Right For You?

Now that we've cleared the air and made the case for carrying a flat deductible for all losses, it's time to figure out what deductible you should carry. $1,000? $2,000? $5,000?

The truth is, it is all going to come down to personal preference and your household's finances. For example, if you do not have $5,000 in your emergency fund, carrying a $5,000 deductible would not make sense. 

Typically, homeowners in Georgia with a $150,000 to $500,000 replacement cost will carry $1,000 to $2,500 for their deductible. Homes $500,000 to $1,000,000 are somewhere in the $1,500 to $5,000 range and homes $1,000,000 and above will be $2,500 to $5,000. Again, it is always going to come down to each individual household's preference and finances. We recommend having your agent or broker gives you pricing at different deductible levels so that you can do a proper cost-benefit analysis to see what option makes the most sense for you and your family. 

The Roberts Insurance Group is a Georgia Insurance Broker specializing in commercial and personal insurance for our clients throughout the state of Georgia. We help our clients lower their cost of insurance with our superior claim and risk management expertise and our extensive carrier access. We are in the business of building relationships with our clients to help them grow and succeed. Contact us today to see what we can do for your family or business.

By now, you're probably aware that there has been a major increase in the cost of new construction homes across the country. The prices of lumber and other common construction materials have been sky rocketting over the last several months due to a decrease in supply and an increase in demand. In addition, labor shortages have drastically increased the cost of labor. 

The recent increases in construction costs have many Georgia homeowners wondering, what does this mean for my home insurance? Is my home adequately covered? Will my rates go up? We're going to answer that for you:

What Does This Mean For Your Georgia Home Insurance?

An increase in the cost of construction DOES impact your home insurance in Georgia. The home that cost $400,000 to build or rebuild a year or 2 ago can now cost upward of $500,000. This means that insurance companies everywhere are having to make adjustments to their replacement cost estimating software to account for the changes in construction costs. Whether you're getting a new home insurance policy or your renewing your existing one, you should expect an increase in the dwelling coverage or replacement cost estimate. 

Is Your Home Adequately Covered?

It is hard to say without reviewing your policy but, in general, your home insurance should still have adequate coverage to rebuild your home in the event of a total loss even if you haven't purchased a new policy recently or renewed your existing one recently. This is because almost all home insurance policies in Georgia come with additional replacement cost/extended replacement cost coverage that adds an additional 25 to 100% of dwelling coverage on top of the underlying replacement cost estimate. All of the homes we insure come with this coverage but I can not speak on behalf of all agents or carriers. I would recommend reviewing the replacement cost estimate and the policy coverage with your agent as soon as possible, just to be safe.

Will Your Rates Go Up?

Yes and no. Any time there's an increase in coverage, there's potential for an increase in the premium you pay. In general, insurance companies have to charge more for $500,000 of coverage versus $400,000. However, there is not necessarily an increase in the potential or likelihood of a claim. If you do get a significant rate increase, it would be wise to have your agent or broker try to re-market your policy to see if there is something more affordable.

The Roberts Insurance Group is a Georgia Insurance Broker specializing in commercial and personal insurance for our clients throughout the state of Georgia. We help our clients lower their cost of insurance with our superior claim and risk management expertise and our extensive carrier access. We are in the business of building relationships with our clients to help them grow and succeed. Contact us today to see what we can do for your family or business.

Can you get special perks insuring your home with the Roberts Insurance Group?-- The answer is YES, YOU CAN!

We all see and hear insurance companies advertise special perks or special features that are available for home insurance. But what are they? Do all companies offer them? 

We're going to go over some special features available for home insurance policies in Georgia. Not all companies have extra features available BUT, here at the Roberts Insurance Group, we have an extensive network of companies that DO offer special perks, which give our clients access to the very best coverage that is specifically catered to each individual household. 

Claim Forgiveness

This special feature can be added at the beginning of the policy and apply right away or it can be something you accumulate over the years. For instance, some carriers will allow us to write the policy with a special endorsement that will go into effect day 1. So if you start a policy on Monday and have a claim Tuesday, that claim will not result in a surcharge or increased claim rating at renewal. On the other hand, some carriers have features built into the policy where they will forgive a claim after you go so many years without filing one, typically 5 years. 

Claim Free Discount

Much like the claim forgiveness feature, this can be something that is applied at the start of the policy or after you've have been with the company for a certain amount of years (typically 3) without a claim. If it is added at the beginning of a policy, then the company is giving you credit for going a certain amount of years prior to the start without filing a claim. 

Decreasing Deductible

Many companies offer a decreasing deductible feature that will lower your deductible by $100 or so each year you do not file a claim. We have found that many clients prefer to carry a higher deductible, meaning they pay a lower premium to the insurance company in exchange for a larger out of pocket co when they file a claim. Adding the decreasing deductible feature gives them the best of both worlds. They get a lower premium now and, assuming they do not file a claim in the first few years, a lower out of pocket down the road when they need to use their insurance. 

Give us a call at 678-250-8133 to see what perks and features are available for you so that you can get the very best value on your home insurance!

The Roberts Insurance Group is a Georgia Insurance Broker specializing in commercial and personal insurance for our clients throughout the state of Georgia. We help our clients lower their cost of insurance with our superior claim and risk management expertise and our extensive carrier access. We are in the business of building relationships with our clients to help them grow and succeed. Contact us today to see what we can do for your family or business.