Is Anyone Tired of INCREASED Insurance Premiums and cancelled their policies?

[Jim C.]

Hello BPer's:

Anyone else out there tired of the annual insurance premiums increasing year after year, even with no claims ever? My rates jumped 25% on all my properties in just 1 year all with no claims! I have Erie Insurance on my properties and have never ever filed a claim. So, it begs the question: Would you cancel your policy and go without insurance? Even if each one of your properties were held in a separate LLC? I am contemplating this and wondered if this is a good idea? The money I would be saving could be used to defend any lawsuits that "may" come my way. I've never been sued, but do understand that its not a matter of if, its a matter of when. Could save me over 15K per year. Thoughts??

[Derek Lacy]

You cannot get an "umbrella" policy without underlying coverage.  If you did, by definition it would not be an "umbrella" policy.  An umbrella policy is an excess liability policy, meaning that there must be a primary policy. 

With that being said, umbrella is the most misused moniker for a policy.  Insurance people have a very specific meaning for that word, most insureds do not.  You can certainly buy a $10,000,000 General Liability policy to go over 1-10,000 single family dwellings and never touch an umbrella policy, but 9 out of 10 investors will call that an umbrella policy. 

To the same, "Self-Insured" is being misused above.  That is more correctly defined as "uninsured."  People like to misuse self insured for uninsured because one sounds better, but self insured means there is an insurance captive (self owned insurance company) somewhere out there, to be fully self-insured.  You cannot prove work comp to a state regulator by just not having it, there is a formal process to self-insured.

Lastly, to the original poster@Jim C. , living in Indianapolis, and knowing a lot about insurance, repeat this mantra when thinking about insurance.  Indiana is a high risk insurance state.  With the new weather patterns (think hail storm every year, high winds every other month, etc), we are no longer low risk with whatever is changing.  So premiums are going up. 

There are three ways to deal with it.  Grin and bear the increases.  Increase retention (meaning up your deductible), but also look at things like putting on hail proof roofing, etc, or go uninsured and maybe increase loss control as well. 

My suggestion is call an actual independent insurance agent and see what can be done.  With a clean claim record they will have an insurer that can do better than Erie.