RISKY BUSINESS

Insurance Info & Risk Management Tips

By Hadley Wood www.hlinwood-insurance.com

Doggonit – Why Is My Insurance Going Up?

with financials and capitalization – to share the risk of claims. Typically, the Re-Insurance carrier is funding 40%-60% of claims. If the Re- Insurance companies decide that the risk in a certain area is too high, they will back out. That will in turn force the underlying carrier to pull out of the market because they cannot promise the shared capitalization needed to fund the expected risk.

Now I know that is all goobly-gook to many people but the bottom line is this:

The hot, sultry days of porch lemonade with friends, beach parties with S’mores, BBQ and pool parties always come to mind when I think of summer.

But what are the ‘Dog Days of Summer’ and what does it mean? It is widely accepted that the meaning derives from the Greek belief that the summertime months of July and August would bring drought, bad luck, unrest and extreme heat. With the rise of the star system Canis Majoris (Greater Dog) otherwise known as Sirius (in Greek - meaning scorching), which rises in the months of July and August, it makes sense that the Greeks would connect the Dog with the Summer months and connect the dots, as they are. We can see Sirius in the sky as our brightest star in the July and August months.

So, the ‘Dog Days of Summer’ does have a deeper meaning - and one we can relate to the rising cost of insurance many of us may be feeling these days. Because rising heat in the summer months brings an increase of fires, floods, landslides, angry tempers – that increases theft, homicides, rape, etc.

• If insurance companies find that any risk is too high, they will back out of a market or state. They may keep current policies but not accept new policies until the risk is lifted.

• If there is an imminent or current hazard (fire/ flood/earthquake/etc.) insurance companies will put a hiatus on writing new business in that area or for that risk.

• If your rates have /are increasing – this is not necessarily because of any action or claim you may have. This is likely because the insurance company has found that your industry or operations or location has had many claims and they have to consider you a higher risk.

• If your rates have gone up significantly, call your broker or agent and ask why. Make sure you let them know you are doing your due diligence to keep risks down (fire suppression, alarms, etc.) Have your Broker/Agent check alternate markets –maybe there is a better package out here for you.

• The rate of violence tends to double between JuneSeptember (SD County Policy Dept)

Michael Kidd

I get calls all the time about this. ‘Why are my insurance rates going up’ OR ‘Why is my insurance canceling me’? Here is a breakdown of the behind-the-scenes logic:

The Insurance business is a business to make money. There are many people involved projecting probable events and possible scenarios that dictate the risk factor for each category of risk. Insurance companies have ReInsurance Companies behind them to back them up

Sadly, significant climate change over the last 35 years has resulted in increased risk of flooding in many states, warming of the oceans which results in more hurricanes in the southern states (and future hurricanes in the Pacific), fire damage in the West and South-West areas and severe drought across many states. The risk factor is higher now and will only increase and insurance rates are likely to increase across the board in the future years.

If you have any Business Insurance questions, please reach out to me. www.hlinwood-insurance.com