Insurance Questions Answered
Two questions raised by a Seven-On-Your-Side report last week are about to be answered.
They both involve how you can, or should, be treated by your insurance company.
John Vaughn has found a new insurer. But he still wants to know what his former insurance company has to say about the way their relationship ended.
Last week Vaughn shared with us how a $3,100.00 claim on his home owner's insurance caused a massive spike in his premium.
"I was expecting a rate increase of ten, fifteen percent. Yeah," says Vaughn.
"What did you get?"
"308 percent rate increase," says Vaughn.
"And did you get any advance notice?"
"No," says Vaughn. "None at all."
Vaughn's annual premium jumped from $2,000.00 a year to over $8,000.00.
No advance notice on a 300 percent rate increase? We asked the Arkansas Insurance Department if an insurance company is required to give a customer notice prior to a rate increase.
Arkansas law requires that "...the insurer shall give either a written notice of no-renewal or an offer of renewal at least thirty (30) days prior to the expiration of the policy's existing term."
Because Vaughn says that didn't happen the Arkansas Insurance Department is investigating Progressive Insurance in regards to this situation.
So the department can't comment on Vaughn's complaint.
But we asked another general question: Can a company raise your premium as much as it wants or is there a cap on annual increases?
We're told there is no statute relating to caps, but companies generally limit increases in order to avoid complaints and the disapproval of a rate filing.
We are waiting to hear back from Progressive. If or when we get a response we will add it.
Air date: April 10th, 2014