Surprise Insurance Spike
JACKSONVILLE (KATV) -
Rate increases are nothing new for insurance companies. But a jump from $2,000.00 to $8,000.00 dollars a year? That is the sticker shock being felt by one family from Pangburn.
When a water leak damaged his home, John Vaughan says the repair bill totaled about $6,000.00.
Vaughan says he and his insurance company split the cost.
With a $3,100.00 claim, Vaughan expected his rate to go up a bit this year.
"I was expecting a rate increase of ten, fifteen percent, yeah," says Vaughan.
"What did you get?"
"A 308 percent rate increase," replies Vaughan.
"And did you get any advance notice?"
"no," he says. "None at all."
Vaughan says he received notice from Progressive of his new rate of over $8,000.00 a year yesterday (Monday, March 31st)...only a day before his bank account would have been drafted (today, April 1st).
He has shared his concerns with the Arkansas Insurance Department and visited with an investigator on Tuesday...while he was out shopping for a new insurance policy.
"I'm an old veteran so like I say...and a disabled veteran on top of that," says Vaughan. "There's only so many eggs in a basket and you can't...you know you're on a fixed income and everything is going up."
The two main questions Vaughan is hoping the Insurance Department will answer...one, is there a cap on how much a premium can go up year to year and two, is there any requirement that some sort of advance notice is given prior to a big increase?
No answers yet...but we'll let you know.
Air date: April 1st, 2014