I recently got our Homeowners Insurance renewal notice. To say I was a little taken back would be an understatement. A 17% increase is a little steep…I sent Allstate an email stating so. Here is the response I got back. Naturally I was disgruntled at the opening considering the responder didn’t even take the time to find out my gender. I’m pretty certain we all know why rates go up…they had to pay out somewhere. As I recall we had some pretty severe tornadoes and flooding this year in several areas. You can bet if an insurance company has to pay claims that may dip into the executive bonus funds…someone is going to pay, pretty simple. Whoever wrote this could easily be a political speech writer. A whole lot of words and really nothing said of any value.
Dear Ms. Page:
Thank you for your request via Allstate.com. Your concerns are important to us and we appreciate the opportunity to address them.
Please allow me to sincerely apologize for any inconvenience you may have experienced.
I understand that you are frustrated that the premium charged is not what you expected. Periodically, it is necessary for all insurance companies to review their rate structure in order to determine whether the amount of premium collected is sufficient to cover operating expenses and future losses, including one that you might file. In order to continue providing the insurance protection required by our policyholders, it is necessary, from time to time, to re-evaluate our rates and discounts. We regret that we have to increase premiums, but please be assured that every effort is being made to manage expenses while providing the service our policyholders expect and deserve.
After investigation of your inquiry, the increase of your policy’s premium can be attributed to several factors. Other potential factors include, but are not limited to, rate increases, policy changes you initiated, or changes in discounts for which you are eligible. In your case the increase in premium was due to your Dwelling coverage limit was changed from $292,000 to $294,000 as part of the Property Insurance Adjustment (PIA) and a regional rate increase. The increase was offset by the increase in some discounts such as Home and Auto and Claim Free discounts.
The Property Insurance Adjustment (PIA) is a clause that is a built-in feature of your homeowner's policy and cannot be removed. At each renewal, your insurance coverage is evaluated. The purpose of this adjustment is to keep up with the pace of cost inflation on the products and services that would come in to play if the property were significantly damaged. If necessary, this coverage is increased to agree with the current value of your home.
Since your last renewal, we changed rates in Virginia due to the following reasons: On 1/24/2011, rates have been updated to more accurately reflect the amount of catastrophic risk each policy presents. On 9/26/2011, because of increases in average losses and changes in average expenses due to weather-related claims. Rates have been updated to more accurately reflect the amount of catastrophic risk each policy presents. Additionally, rates have been updated to more accurately reflect the amount of risk each policy presents. Rating plans affected include Home and Auto Discount, Claim Free Discount, Amount of Insurance, Rating Group, and Territory. The Home And Auto Discount was changed from 35.00% to 40.00%. The Claim Free Discount was changed from 15.00% to 20.00%.
I’m going to close your file for now but please reply to this e-mail at your earliest convenience if you have any questions. I can be reached between the hours of 9:15 am and 5:15 pm Eastern Standard Time.
In an effort to continue to improve our processes you may receive a survey call asking how well I handled your concern. We value your responses so we can provide the best customer service. Thank you for doing business with Allstate.
It was signed by a Customer Resolutions staff member, just a first name…if she assumed we were friends she was sadly mistaken…I assume it was a she, either that or his parents were influenced by Johnny Cash’s…A Boy Named Sue.
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