When you are recovering from the excesses of the holiday season, both physically and financially, the last thing you want to face up to is an increase in your insurance rates. But that is exactly what Mercury Insurance policy holders in California will have to do. The company, which was forced to lower premiums in June of 2013, has announced a rate increase that will come into effect from January 2014.
Home, rent and condo insurance rates on both new and renewal policies will increase by an average of 8.6% statewide. If the lowering of rates in June is taken into account, the net increase will be an average of 3%. In the case of auto insurance, the increase will average out to around 6%. There will however, be major changes in specific areas, with some premiums actually going done. For example, while Liability coverage will increase by about 16.8%, Collision coverage will go down by about 5.4%.
Reducing the Impact
Fretting about having to pay more for insurance is counterproductive. What people should be doing is looking at ways to minimize the financial impact. For example, Mercury offers a discount of 15% if both home and auto insurance policies are with them. Many policy holders have their coverage divided amongst different insurance companies. Bringing them together under one company can result in significant savings that would not only offset any increase in rates, but even result in a net saving.
Those who are going to be affected by the increase in Mercury Insurance rates should contact their insurance agents or brokers to examine the full implications of the rate increase and the avenues for reducing the impact.
Take a Long Term View On Insurance
A common mistake that many people make is to consider and evaluate their insurance policies on an annual basis. That does help with financial planning and budgeting. But insurance is not something that is required for a limited period. Policy holders will not sell off their homes and move into hotels for the rest of their lives. They will not sell their cars and start travelling by bus or taxi. They will not stop falling sick or suffering from medical conditions. They will need insurance coverage against these and the other risks for the rest of their lives.
In a world of increasing costs, insurance rates will continue to rise over time. This can be compensated for by reducing the quantum of coverage, but with a very few exceptions, this is a dangerous risk to take. The better alternative is to think of insurance as a lifelong association. Association is a far better word for the need for insurance than “investment” or “expenditure.” This approach will enable the policy holders to look at their insurance needs and costs with a long term perspective and plan for not just one year but for a much longer period. This can be difficult for the layman who may not have expertise in insurance issues or be a qualified financial planner.
Talk To Experts
Insurance by Allied Brokers know the insurance business inside out and have the expertise to guide clients to the most cost effective insurance coverage. In addition, we will be able to help policy holders to plan their long term insurance to minimize the impact of future insurance rate increases. Call us at (650) 328-1000 to know more about the rate increases and with any questions you have about your insurance policies.