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How Insurers Determine Your Premium: An Interview with Chris August of Prepared Insurance Company

By Chris August

Tell us a little bit about your company and its foundation.

Prepared Insurance is a leading home insurance provider in the State of Florida. We have been in business since 2009 and headquartered in Tampa, Florida. We offer coverage for single-family dwellings, rentals, condos, flood and life insurance. When we entered the Florida market, we did so with the intent to target older, well-constructed homes. This niche market has been underserved since new statewide building codes took effect post 2004/2005 storm season. Many insurers only write policies for homes built in 2002 or later because reinsurance costs for those policies are lower.

First off, what is the definition of an insurance premium?

An insurance premium is the financial cost of obtaining insurance cover. In return, a binding contract to cover certain events is entered into.

What factors do insurance companies use to determine your premium?

There are many factors that determine an insurance premium. These factors must be filed and approved with the Florida Office of Insurance Regulation. A short list of the factors that determine an insurance premium are: age of home, dwelling coverage amount(s), geographic location, discounts, deductible levels, type of wall construction and roof type/geometry. There are also several endorsements that can be increased or decreased that would affect premium amounts as well.

Do prior insurance claims affect obtaining insurance coverage?

Yes, prior insurance claims may affect or hinder obtaining insurance coverage with certain carriers. One of the biggest myths regarding home insurance in the State of Florida is that if you have an insurance claim, a carrier can surcharge your policy upon renewal. Home carriers in Florida cannot surcharge an individual policy for experiencing a claim. It could however, affect eligibility and may result in a non-renewal. Prepared Insurance incorporates flexible underwriting guidelines to best suit a policyholder's needs.

Why is my income not a factor in this process?

The calculation of a premium is mostly based off of the characteristics of the risk itself. Individual or household income is not factored into this equation.

Is there any way to receive a reasonable premium with a low credit score?

Not all insurance carriers run credit as a qualifying underwriting factor. Prepared Insurance does not utilize credit scores to determine eligibility. We analyze risk characteristics to determine eligibility and premium.

What is Prepared's financial rating?

Prepared Insurance Company is rated A Exceptional by Demotech, Inc. Demotech is a leading financial analysis firm that been serving the insurance industry, particularly Florida for quite some time. Mortgage lenders recognize ratings from this firm. Additionally, Prepared Insurance obtains catastrophic and non-catastrophic reinsurance coverage via only A-rated reinsurance carriers.

What's the best way for people to get in contact with you and your company?

Prepared Insurance Company partners with top independent insurance agencies in the State to represent us. Customers who are interested in obtaining coverage with Prepared can contact us toll free at 877.313.1824. One of our friendly customer service representatives would be happy to assist to place customers in contact with an approved agency nearest them. You can also visit us online at www.preparedins.com.

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About The Author

Chris August is Director of Marketing at Prepared Insurance Company.

Phone: 877-313-1824

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