Are my Insurance Rates going up because of all the homeowner claims related to the recent ice storm?

Yes, we here at Vaughn Insurance predict, but as independent agents, we help our clients shop around for the most affordable rates.

The insurance business is based on the spread of risk. The more widely risk is spread, the more accurately loss can be estimated (from the Insurance Information Institute). Everyone pays for the losses of others.

After a regional disaster insurance rates may go up for two reasons. First, the insurance companies have to pay out a large number of claims that may amount to more money than it has set aside in their capital reserves. Second, the company has to rebuild the reserve after a disaster to pay future claims. Usually everyone in the geographic region hit by disaster will see some form of increase in their insurance premium.

Sometimes a single disaster is not enough to raise rates in a certain region. But in the last six months western Kentucky has suffered losses from three catastrophic events. On September 14, 2008, remnants of Hurricane Ike caused extensive wind damage in the area. Because of the damage, Kentucky's insured catastrophe losses were among the fifth highest in the nation for the third quarter of 2008, according to the Insurance Information Institute. The widespread damage sustained in the recent ice storm on January 27, 2009 only compounded the problems from that disaster, which was followed by another wind storm on February 11, 2009.  As well as the current economic climate.

Even though rates are likely to rise, as independent insurance agents we may be able to find you more affordable coverage. This is because we have access to multiple insurance providers and can quote prices from several sources so that you can pick the plan that is right for you.  Be sure to contact us if you feel you are paying too much. We offer free price quotes!