Homeowners can expect to pay more for home-owners insurance.
Most companies are increasing rates by 9 to 23 percent, said Kelvin Collins, the president and CEO of the Central Georgia Better Business Bureau, citing information from Insurance Journal, a monthly publication.
Collins attributes the rate increases to insurance fraud, mostly roofing scams.
“Insurance companies have really taken a hit in the last couple of years,” Collins said.
Rate increases are also the result of storms over the course of several years and the rising cost of housing for demolitions and rebuilding, said Dave Colmans, the executive director of the Georgia Insurance Information Service.
In 2009 and 2010, Atlanta-based American Shingle, which operated in 16 states and eventually filed for bankruptcy, went door-to-door and told homeowners that their homes were hit by hail and the company could help them get a free roof, Collins said.
American Shingle asked homeowners to contact their insurance company and then convinced the insurer to pay for a new roof. American Shingle took the money without providing work, which changed the roofing industry. Other companies also conducted roofing scams.
“With the change in the roofing industry, the homeowners insurance was paying out more, which we all knew would lead to higher premiums at some point,” Collins said.
It’s a domino effect. After one company increases its rate, others “fall in line,” he said.
“Some of your more independent companies, if they don’t get in on this cycle, you can expect it for the next cycle. We’re all going to see it at some point. Some of us just will see it sooner rather than later,” Collins said.
Each company has its own rate structure, which must be approved by the state department of insurance, Colmans said. “An increase in one company would not be the same as an increase in another company,” he said.
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