I like my clients to make informed decisions. How do I do that? I teach my clients how a renewal is calculated by the insurer. This will be my series on what some of the definitions mean.
In the simplest terms, the Insurance Company is saying that whatever you purchased last year will be a certain percentage more next year. For example, every year the Dentists increase the amount of money they charge to the Insurance Companies for Dental procedures. Under the Extended Health a prime example is newer, more expensive prescriptions. I will use my Mom again as an example, she was on a relatively inexpensive prescription and the drug company stopped making it. She is now forced to look at other alternatives.
The Trend Factor is added onto the Loss Ratio. A Loss Ratio is claims/premium. Extended Health Trend Factor has dropped to below 10% and Dental has stayed pretty stable at around 7%.
Next week I will explain what a Reserve is and how it affects your renewal.
If you want to work with a Broker who helps you make informed decisions, contact Glendinning Insurance Services.