Forecasting Personal Insurance for 2003
Pick a reason, 9/11, the shrinking values on Wall Street, or just the economy, they’re all appropriate, and they all lay the groundwork for another less than optimistic year for personal insurance. If you do not have youthful operators, tickets/accidents or claims, a costal property or renovation upcoming, you'll get by in 2003 with just a rate  increase. But  for the rest of you, the
unfortunate ones, you can look forward to a diet of coverage changes & restrictions, nonrenewals and of course rate increases.
  Some of the Same
2003 will be a variation on “what we saw last year” while insurers work to rebuild their reserves and the bottom line. Here are some of the things Shepard on Insurance expects for 2003
  1. Limited markets for high valued homes. Chubb and AIG continue to be the best markets for high values.

  2. Preferred risk auto insurers (e.g. GEICO) will begin to lose some of their luster as claims catch up with underwriting.

  3. Claim service will suffer in the next few years while insurers watch their bottom line with less service, lower offers on settlements, and more claim denials.

  4. Mold - exclusions and limitations will start showing on policies before year end.
  What should you do to ride out the rough spots

 

  1. Move to larger deductibles while the insurance industry and the economy recover. Insurance should be for the catastrophe.
  2. Try to protect your insurance by placing all your coverage with one insurer, especially if you have a difficult to insure risk such as a coastal property.
  3. Recognize the hot spots that insurers regard as trouble:

    1. Youthful operators - be  prepared  to  pay some  of the claims for your children.
    2. Renovations/construction - especially major reno's. Most home losses occur while construction is underway. Make sure your contractor has ample coverage.
    3. Coastal properties, both primary residences and vacation home.
How long will this last?

It will take 3-5 years for the insurance industry to fully recover from the retraction on Wall Street and the impact of 9/11. In that time it is best to:

  • be patient, expect delays in all aspects of company service.
  • lean on your agent to make it happen, if it doesn’t, change agents.
Pataki, what were you thinking
Governor George Pataki is signing a law into effect for New York drivers that allows a wife to sue her husband (or vice versa) under the same auto policy after an accident. George, what were you thinking?
  Leasing No More
 
Look for automobile leases to dry up in the future, unless liability laws are revised to shield the Leasing companies from the cost of lawsuits from auto accidents. In addition to the driver of the leased vehicle, leasing companies are being drawn into lawsuits because of their deep pockets in some serious accidents.
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