Homeowners face higher insurance prices

Homeowners face higher insurance prices

Posted:
Some homeowners insurance customers will soon pay higher deductibles if anything happens to their homes. Some homeowners insurance customers will soon pay higher deductibles if anything happens to their homes.
"I know they're in a business to make money and that's what they need to do, and it is, it hurts, but you pay it to hope you never use it," homeowner Beverly Myers explained. "I know they're in a business to make money and that's what they need to do, and it is, it hurts, but you pay it to hope you never use it," homeowner Beverly Myers explained.

By JESSA LEWIS
6 News Reporter

LENOIR CITY (WATE) - Some homeowners insurance customers will soon pay higher deductibles if anything happens to their homes.

The increase isn't just a few dollars. In some cases, it's several hundred.

Beverly Myers has had Farm Bureau insurance since 1984. She doesn't remember her deductible ever going up - until now.

"I really wasn't surprised, because the way everything is going up. You know, your home is worth so much money. $1,000 compared to $100,000 to replace it, I didn't feel like that was outrageous," Myers explained.

Customers are notified of the minimum deductible increase to $1,000 as they renew their policies.

"We try to maintain a reasonable and affordable rate structure. The deductible decision was made so that we could continue to do that," said Farm Bureau Insurance Vice President of Corporate Communications Dan Batey.

The increase puts Farm Bureau's deductible in line with other big players in the industry, including State Farm, which increased its minimum deductible to $1,000 a few years ago.

Shafer Insurance in Knoxville says the nine companies they write policies for have either raised rates or increased deductibles over the past couple of years.

Farm Bureau says the change is because of the storms in April 2011.

"That year we spent $1.40 for every $1.00 in premium we took in, so no business can survive long with that kind of arithmetic happening, so we had to do some things to stabilize the situation," Batey added.

Still, Myers says she is disappointed by the increase.

"I know they're in a business to make money and that's what they need to do, and it is, it hurts, but you pay it to hope you never use it," Myers explained.

According to CL Butcher Insurance in Knoxville, the state of Tennessee ranks second when it comes to insurance payouts compared to premiums paid.

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