explain, explaination, explaining, explained on why your insurance premium keeps going up

It seems every 5 seconds an insurance news is born or to say the least insurance companies have been under a lot of scrutiny since the devastating event of hurricane Katrina on the Gulf Coast of United States and an equally more the catastrophic event of 911.

Mentality 1
Angry policyholders wonder why their insurance premiums keep going up when either event occurred in neither of the states they belong or live in. What happens in New Orleans stays in New Orleans!

Mentality 2
The hope for Global Warming and insurance industries make up sex will never happen unless of course “You’re covered”.

Let’s play connect the dots:

Dot 1.
Before global warming was just “warming” and not so much served as a surf and turf feature or an early bird special in our high definition plasma screens, insurance premium was just routine.
Nowadays global warming come in a nice fully loaded gi-normous SUVs with an option to buy vinyl siding wild fire ready poorly constructed homes. In each case, these factors amongst other issues that affect our world are not sustainable to our environment and consume far more energy and other vital natural resources than required to comfortably meet our needs.
It’s getting hot in here so let’s take off…..our coal. (whoa nelly!) Because of increase consequences of global warming, in which in part by the emission of carbon dioxide, mainly stemming from compsumption of coal. (Wait a second this sounds like a lead to different blog…..) I’m sorry I left the reservation. Let’s get back to the point.
If you live “in the zone” (not to be mistaken for the famous diet in the 90’s or Brit Spears hit song) the zone in reference to hurricane high storm risk area, the whole east coast, tornado alley, the whole mid-west, hailstorm, flood, wild fire in Hellywood or anywhere where’s there’s drought there’s fire (head for the hills Y’all) consider yourself served, canceled, non-renewed, or no new risk.
Erratic climate change is a risk far too great for insurance companies to take or ignore. Major weather related catastrophe magnify losses therefore resulting in profit loss and increased in premiums.

Dot 2.
Before 911, terrorism coverage was included in commercial policies. Since the September 11 attack, insurance companies drastically change their premiums or eliminated terrorism coverage entirely. Reinsurance companies stopped providing terrorism insurance to primary insurers because the risk was simply too high and too much.
Obtaining commercial insurance were put on hold or canceled because owners and investors could not find a safeguard for their business in event of a claim. Not good for business nor the economy. Imagine if you were trying to establish even a small business in Nebraska and can’t move forward because you can’t find coverage. Hence, Congress passed the Terrorism Risk Insurance Act of 2002. This Act launched a temporary federal program through which the federal government shares with the insurance industry losses resulting from acts of terrorism therefore insurance will be available for construction projects, property acquisitions, and other real estate transactions and keeps the payroll going.

Dot 3:
Believe it or not, insurance companies just did not charge enough premiums from the get-go. Companies just couldn’t or did not know the magnitude of damages from an exposure. So when claims are made premiums are then increased to counteract shortfall.
Rumor has it that actuaries will begin taking courses on “Clairvoyance” and apply the class as continuing education (c.e.) credits in order to hone their current skill in assessing risk.

So there you have it! Before you break up or threathen to end your love-hate relationship with your agent, consider the good times: where their there to hold your hand when you filed your first claim? Did they send you a 529 card congratulating you on your new baby? and did they promise to be with you long term as long as you have annuities? Insurance companies are all the same no matter where you go. The grass is only greener “if you’re not in the zone.”