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...and here I thought insurance was the business of risk -- if they raise our rates every time they incur an expense, where is the risk for them ?
As captainNJ pointed out, it's about sharing the risk by pooling resources together.
Risk for them (insurance companies) come from calculating what the chances are of say disaster hitting and how much to charge you, while using that money to invest and make returns on that money. So in another word, risk for insurance companies is that they may not have been charging policy holders the right amount because their model didn't expect two supposed one hundred year storms back to back and therefore they didn't have enough money to invest to make returns that they needed to cover for possible damage...should it happen.
Which did happen so...now they need mo money. Anyway the whole logic is, you pool money, and use that money to cover for damage, while that money sits somewhere...you use that money to make money.
Mine went up around 13%. I live in Gloucester County and had no damage from either storm. Heck, we didn't even lose power or cable. As others said, it's all shared risk pool. The risk of another storm like Sandy, which was considered almost impossible to have happen, is higher then it used to be so the insurance companies need to hedge against that risk and make up for their losses.
I live in Linden (Sunnyside); when I bought 3 years ago I rec'd insane homeowner's quotes; through my Allstate agent, he wrote me a policy through Selective (Allstate doesn't write homeowner's in NJ, only rental policies) at less than half the cost of anyone else. Full coverage, I'm paying $401 this year up from $394 last year. I'm not in a flood zone but also have flood policy to cover any damage from ground water or street flooding to my foundation which is very inexpensive. I suspect if you live in a town that floods the way Cranford + Rahway do, you can expect higher premiums even if you didn't have a claim. Somebody has to help pay for all the people who did. If you own certain breeds of dog, have a trampoline for the kids, etc your rates can go up. I recently shopped around for auto, umbrella + homeowners but the deal I have now is still the most affordable. Had State Farm, they wanted to double my rates for moving to Linden, Allstate quoted less than I had been paying for better coverage on the 2 cars. They are on Centennial Ave. FYI, Selective has an excellent rating with A.M Best (who rates insurance companies). Their offices tend to be in Morris/Sussex but I went thru Allstate agent for mine. Good luck.
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