A Coming Trend in Property Insurance Claims

New Insurance Claims Trends

Mr. Wagner, I sent you a message regarding your marketing class in Jacksonville. Additionally, I was in the Symposium in Georgia in October. When you gave your presentation I knew you were on to something. I used to be a XXXXXXX member, but they could not understand why I was not having success with their program.

Here is a post that I made on the ICS bulletin board over three years ago. The rest of the country needs to know this is where “the industry” is going. In our area we are ALREADY in sky-high deductibles – the residential market has gone mad. We had NO warning as three hurricanes created a “perfect storm” for insurance companies to launch their new offensive!

Mike Conroy wrote the following almost 5 years ago: Posted By Mike Conroy

A coming trend in the insurance industry – Over the top deductibles. In various states, (FL, AL, MS, LA), the insurance firms have asked and received from state insurance commissioner’s, ever-increasing rates – all the while requiring higher deductibles, and it’s working for them.

For example, my home is inland about 3-4 miles and has never had a claim from any storm. My rate for insurance was a bit over $1,200 a year with a $1,000 deductible. Two years later its $4,800 per year for the same $1,000 deductible. I opted for a lower yearly cost and took on a higher risk. Now the insurance firm is off the hook until my damages reach 2% of the replacement cost of the house.

Insurance firms want to make money, they do not want to pay claims. In the past, they had a hard time not paying out money when deductibles were somewhat reasonable. As this area went, the country will go. The logic is flawless. You must have insurance if you have a mortgage. Most people will have a mortgage at least for some time in their lives… High premiums mean the insurance company takes in a lot more money and high deductibles mean they get to keep it.

In the near future (4-5 years) the whole country will be forced into the Florida model. No hurricanes; that’s ok, the insurance industry will convince your state legislators and commissioners that the risks your area has; snow, floods, wildfires, ufo crop circles, whatever is necessary for them to raise the premiums and increase the deductibles all the while earning record profits. And you thought the oil industry had a gig, insurance firms do it without even getting dirty.

Big deductibles mean adjusters don’t even go out and look at the $5000. loss on a $150,000 home with a 5% deductible. Imagine the savings. They can even cut down on phone adjusters. And remember you must have insurance if you have a mortgage so even the sales staff can be paired down along with their commissions. How many of your current residential clients have trouble coughing up the $500-1000 deductible now? Imagine the thrill of answering the potential client when he asks the question “how much is this going to cost?” … the old answer was “how much is your deductible” won’t sound nearly as reassuring when the deductible now is 2 months salary. By the way, many, many policyholders don’t know what their policy says. You may be told “I’ve got a $500.00 deductible”, but that’s only for dog bites, not icemaker floods.

My advice, figure a way to serve people that have reserve funds, such as government, schools, businesses, housing complexes. SOONER, rather than later people are going to have to pay for ever-increasing amounts to repair their homes while all along paying ever-increasing insurance rates. Except on the largest of jobs, we will all be in the same boat as the carpet cleaning business dealing with low ball restorers and coupon specials.

We’ve got to get around the insurance firms as they are NOT really your customer now and WON’T be your customer at all in the future. Posted with permission by Mike Conroy

WebMaster comment: This is why I offer a Marketing Course to help Mitigation and Restoration Contractors start NOW – preparing for the near future – when smaller residential losses will no longer be readily available to you! REMEMBER, Mike C wrote this THREE years ago- and it is coming to pass. Take heed of this prophetic insight.

Dick Wagner is a Disaster Restoration Sales Coach and Commercial Marketing Consultant. 419-202-6745