And since I work for you and I am not on the payroll of a single insurance company, I have the ability to tell you what happens. I don’t have a corporate giant telling me what I can do and can’t do. But first, here’s a short story about how someone almost learned the hard way how insurance can bite you…

Recently, a homeowner called our office and asked for a homeowners insurance quote. After discussing her coverage, we found that she was being non-renewed by a competitor of ours for having too many claims. After looking over her CLUE (claims history) report, we discovered that she had 3 claims in the past year. One from a broken water heater that damaged her floor for $750. Another from a tree limb that fell on her roof for $350 in damages and the last was vandalism damage less than her deductible. Her insurance company only paid a total of $1100 in claims and canceled her. Sounds crazy, huh? The truth is that this is not very uncommon.

Although the amount the insurance company paid was low, the frequency was higher than what the insurance company’s guidelines allowed. The worst part of this story is that she is going to have a very hard time finding an insurance company that will insure her. Once cancelled from a company and with so many claims in a short time, very few companies will take on a new client with this history. The companies that will insure her are typically very expensive and their policies will lack important coverages.

So how did this happen? Insurance companies report claims they receive to a service and record these claims on a CLUE report for policy holders. When you buy a home or car insurance policy, insurance companies use these CLUE reports to determine eligibility and premium amounts. If you have too many claims within a specific time period, they will either offer higher rates or even deny you insurance. If your claims history is favorable, you can take advantage of lower rates and significant discounts. In this case, the insurance company saw a significant number of claims in a short time. Based on their underwriting guidelines, they determined this person is highly likely to have more claims.

Why? Because, statistics show that someone with a significant number of claims in a short time is most likely to have more claims and more expensive claims. I could give you an entire lesson on how insurance actuaries determine probability and how they underwrite but, I won’t bore you. The bottom line is that insurance companies are in the business of being profitable and the premiums they collect are pooled together to help their clients cover their losses. They are not in the business to pay irresponsible losses that they shouldn’t have to charge their other clients for.

In this case, I knew she simply had a stroke of bad luck. She is responsible and takes care of her property. She just didn’t know how insurance companies get scared when a string of claims occur. Insurance is all about numbers and frequency of claims will often get you in more trouble than the amount of the claim. A client of ours had a house fire a few years ago that caused over $200,000 in damages. The company paid the claim and never even considered to non-renew them. We’ve had half million dollar yachts get damaged, car accidents with over $100,000 in damages, even a $850,000 liability claim and still no problems. Why? Because these people were responsible, had a great claims history and bad things just happened.

So, what should you do when you have a claim?
Always call our office first. Unlike some agents that work for the insurance company, we don’t have to report every little claim unless you want us to. We work for you and can discuss the claim before calling the company. There are times that small claims may not seem worth reporting but could develop into a large claim down the road. We need to discuss this possibility. We’ve helped our clients get millions of dollars in claims paid fairly and fast over the years. We’re here for you too. So, if you ever have a claim or even questions about claims, pick up the phone and call us.

By the way, we were able to help this lady get her home protected with a good company. It just took some extra convincing our part with an insurance company.

# 10 – 67.4 percent of all new claims opened started after the policyholder reached age 80. If you live a long life, you’re going to likely need long term care and be very glad you have a policy to pay benefits.

# 9 – 49.0 percent of all new individual long-term care insurance benefits for newly opened claims paid for homecare. Only a fourth (27%) of new claims paid for nursing home care.

# 8 – 45.0 percent of those who applied for long-term care insurance between ages 70 and 79 were declined coverage for health reasons. If you already have this protection in place, congratulate yourself. If you don’t, please don’t wait because your health can change at any point.

# 7 – 28.2 percent of nursing home residents over the age of 85 have been in the facility for three years or longer.

# 6 – Alzheimer’s disease was the leading reason someone used their long-term care insurance for either home health care or nursing home care. Stroke was number two for home health care.

# 5 – Nearly one in five (20%) of those receiving benefits from their long-term care insurance transferred from home health care to a facility.

# 4 – The largest open long-term care insurance claim for a woman has exceeded $1.5 million in paid benefits. Her claim has lasted almost 14years and started after she paid about $2,500 in total premium.

# 3 – Women accounted for 64 percent of all newly opened long term care insurance claims.

# 2 – Over 85 percent of women age 85 or older will be living alone.

# 1 – The long-term care insurance industry paid out $6.1 billion in benefits to some 200,000 individuals with insurance protection in 2010. The number will increase each year as the current number of policyholders grow older and, as a result, are more likely to begin their claim.

If you already have your long-term care insurance plan in place, congratulations. If not, why not contact us today for no-obligation information. Call us at 651-462-3724

Facts courtesy of the American Association for Long-Term Care Insurance

Ask yourself this: if your car is broken into, what will the thief take away that would put your home at risk for a break in?
• GPS with your home address programmed in
• Your garage door opener
• A spare set of keys
• Valuable or sensitive information in your glove box
Play it safe and program your GPS with a nearby address in place of your home address (like a store or gas station) and be careful about what you keep in your car.

• GPS with your home address programmed in
• Your garage door opener
• A spare set of keys
• Valuable or sensitive information in your glove box
Play it safe and program your GPS with a nearby address in place of your home address (like a store or gas station) and be careful about what you keep in your car.
Keep Yourself Safe & Avoid a Homeowners Claim

I recommend that you keep valuables such as GPS systems out of sight in your car. I just received one of those forwarded emails from a friend with another GPS related warning that should be considered.

Ask yourself this: if your car is broken into, what will the thief take away that would put your home at risk for a break in?
• GPS with your home address programmed in
• Your garage door opener
• A spare set of keys
• Valuable or sensitive information in your glove box
Play it safe and program your GPS with a nearby address in place of your home address (like a store or gas station) and be careful about what you keep in your car.

Security-Victor Insurance Agency will donate $10 for each container of items to be shredded to Lakes Area Youth Service Bureau (up to $500). The public is also encouraged to donate money to Lakes Area Youth Service Bureau at this event.

If you have any questions please call Jerry Hendrickson at Security-Victor Insurance phone number 651-462-3724.