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Premiums a challenge for many

With the costs of food, gasoline and other essentials hitting all-time highs, there is some good news on the insurance front. Premiums are generally trending down, especially auto insurance, which may fall more as people drive less.

Unfortunately, consumers are still struggling with paying their insurance premiums, according to insurance professionals. They are beginning to see their clients dropping coverage, or falling behind and incurring additional fees that only exacerbate their financial troubles.

In May, the Mississippi Department of Insurance approved a rate reduction to State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company. The average reduction, which becomes effective June 23, will be up to 2.9%.

A factor in the rate reduction was a decrease in the number of automobile accidents. Ironically, the National Association of Professional Insurance Agents says high gas prices are causing the public to drive less, which means a drop in accidents and corresponding decrease in premiums.

Of course, lower premiums are being more than offset by skyrocketing gasoline prices, which, in turn, is negatively affecting the cost of food and other essentials. According to agents and insurance leaders across the state, the strain is beginning to show.

“Oh yes, I’m getting more and more calls from clients who are having a hard time paying their premiums,” says Sharon Wood, an agent with GuideOne in Brandon. “I had a client last week who had let his insurance lapse, and now, to get it reinstated, he has to pay about $900. He didn’t have it, and said he would get back to me. It needed to be paid by Friday. It’s Tuesday now, and I still haven’t heard from him.”

Wood says her phone is ringing of late, calls from people who are falling farther and farther behind. She says many incur late fees and other penalties, which only leave them in more of a financial bind. But if the choice comes down to paying the light bill or the car insurance, it is usually the insurance that is dropped.

Dian Lewis, CIC, commercial operations manager at Ross & Yerger in Jackson, is hearing the a lot of that kind thing.

“Premiums are actually going down, not only auto insurance but even some property insurance,” Lewis says. “Still, people are having a hard time, no doubt.”

Peggy Hemphill, vice president of Fox-Everett Inc., says it is difficult to hear clients struggling and not being able to anything to help.

“You have to have a servant’s heart to be in this business,” Hemphill says.

Hemphill points out that homeowners rates are filed, approved and regulated by the state. She and her peers can not “play off the rate card.” Thus, their hands are largely tied.

Wood says that is perhaps the most difficult thing to deal with.

“I just want to help them, do something,” she says. “I hurt for them. I can try to get them a better rate, try to work with them where I can. But there is only so much I can do. It’s heartbreaking.”

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.

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