Cost of Insurance

There are several reasons for increased premiums lately and unfortunately several of these reasons have coincided. For some policies this has resulted in dramatic increases in premiums!

General factors for increased premiums include:

• A general increase in the size and number of claims.
• An overall increase in theft and insurance fraud.
• A general financial downturn in some markets. This has impaired the ability of insurance companies to earn money that might otherwise offset claims costs.

Specific factors increasing the cost of insurance include:

• The collapse of HIH. This has put a lot of pressure on insurance companies to revise the way they assess risk. The extra scrutiny has resulted in more risks being identified.
• Terrorism, war and natural disasters have proved expensive for insurance companies of late. Bombings, fires, floods, storms and droughts have all put pressure on insurance companies to increase your premium.

It's not all bad news however. There are some simple things you can do to reduce your premium:

• Assess your risk regularly and demonstrate to your insurance company that you are making an effort to prevent problems before they happen. Not only will this give them a reason to lower your premium but you'll also enjoy fewer insurance incidents. Factors you can help control include fire risk (and your response to a fire), employee education & morale, theft risk (deterrence & prevention) and general safety for you, your staff & the public.
• Assess your risk regularly! This one is worth repeating. Insurance companies want to know that you are aware of and trying to reduce your risk.
• Be honest! Telling us (and therefore your insurance company) how many claims you've had may cost you a little more but not nearly as much as a denied claim might.