Insurance rates in the state are on the rise for many.
This has led to an increase in calls to agents as consumers demand a reason for the higher prices they’re seeing. And the Delaware Department of Insurance warns those consumers the answer may not be as simple as they’re made to believe.
The Dept. of Insurance says recent misrepresentations by insurance companies have led to the erroneous belief that the Department is to blame for rate increases.
Insurance Commissioner Trinidad Navarro says while DOI analyzes and negotiates proposed rate changes from agencies, they do not set them.
“We can fine them up to $10,000 in concurrence when they do that. We don't want to do that. We want them to be straightforward, and explain to their policyholders, their clients, why they're seeing these increases. And explain to them what's the best coverage. That's why people use an agent or a broker- to explain what’s best for them.”
Any misrepresentation of how insurance rates are set is a violation of Delaware Code.
Navarro says the rising rates consumers are seeing are due to more and more companies losing profitability.
“Their loss ratio was an excess of 100%, meaning that they paid out more than they actually took in in premiums in Delaware. And so why is this happening, what's this phenomenon that's led to these increases?It's a perfect storm.”
That perfect storm encompasses rising cost of repairs for vehicles, continuous supply change issues, the greater frequency and severity of car accidents on Delaware roadways, and the worsening effects of severe weather due to climate change.
Navarro reminds consumers that they have options when it comes to choosing their insurance policy, and encourages them to shop around to find the best option to fit their needs.
The Department of Insurance is also working to address some of the factors leading to higher rates, including working with climate specialists to discuss a plan for areas prone to climate disasters, such as flooding.
