Property Rate Increase – Email from January 2021

Important Update Announced January 11, 2021

We are implementing an increase to our residential and farm property rates, including new discounts and surcharges. This will be effective for:

March 1, 2021 for New Business and Renewals

Why are we doing this?
We’re doing this for a few reasons. We know that we need to take a rate increase in property. We also want to ensure that our pricing model is rewarding risks that do well (like clients with no mortgage, no claims, and up-to-date heating), and that we want to specialize in, while surcharging higher-risk properties (like ones with oil heat). 

We want to continue our wonderful partnerships with you, our Broker partners. And that’s why we’re capping some of the larger increases for year one, and splitting them between two years. Keep reading to see the exact numbers.

What is the base increase we are implementing?
6% on protection 1, 1A, and 3
8% on protection 2 

We are updating the farm rates to match the previous property rates. 

What surcharges are we implementing and changing?

  1. Oil Heat Surcharge of $100
  2. Wood Stove Surcharge (Primary Heating) is changing from $100, to 10% of the base premium
  3. Wood Stove Surcharge (Auxiliary Heating) changing from $60 to $100
  4. Sewer Back-Up Surcharge is increasing by $50 for each limit level (Note: Our Water Protection Coverage is NOT increasing, just the Sewer Back-Up Surcharge)

What discounts are we implementing and changing?

  1. Mortgage-Free Discount is being raised from 10% to 15%
  2. Discount cap is being raised from 55% to 70%

What is the average increase?
The average premium increase will be 5.2%. However, there will be both increases and reductions in premium. Jason will be sending your dislocation lists so that you can see exactly which policies are seeing a larger increase.

What will we be doing for those with larger increases?
We want to make this rate increase as easy as possible for our policyholders, and that’s why we’ve capped the maximum one-year increase.

For those with an increase of higher than 15%, we will stop those renewals, and only implement a 15% increase this year. The remainder of the increase will not be implemented until next year. For example, if a client has an increase of 20%, we will only add a 15% increase this year, and the remaining 5% next year. 

There’s one exception to this rule: If the policy is getting an increase of over 15%, but the increase equates to $150 or less, the policy will receive the entire increase this year. For example, a client has a total premium of $750. Their policy is also getting a 20% increase. Since that only adds up to $150,  they will receive the entire increase in year one.

What can you do to make sure you clients are getting a fair price?
This is a great opportunity to make sure your clients have all eligible discounts (new and existing). Plus, with our discount cap raised, policyholders might have an opportunity to get even more off of their premium.

If you have any questions at all, please feel free to contact Jason or any member of the Underwriting Team.

Want to see the original email sent January 11, 2021?