Low Loss Ratios of Senior Discounts Insurance

PRUPAC (Prudential Project Advisory Committee) estimated that the senior discounts insurance would apply to about 25 percent of its customers.

That low loss rate means a lot to insurance companies. One example: Colonial Penn Property/Casualty Insurance Group, which also specializes in selling insurance to seniors, had enjoyed two decades of strong performance when it decided in the early 1980s to expand beyond its traditional market. The expansion was a disaster. In 1991, New York-based Leucadia National Corp. purchased Colonial Penn and turned its focus back to selling property/casualty insurance to seniors.

Within a year, Standard & Poor’s Corp. said it had increased its rating insurance of the company’s claims-paying ability to Triple-B-Plus. S&P said: “The rating is based on management’s demonstrated commitment to running a low-cost operation, a re-emphasis on the group’s traditional underwriting niche, and S&P’s belief that loss reserve levels are adequate.”

Most importantly, S&P said it “views this niche market favorably, because people over 50 have historically produced better underwriting results than younger insureds in the personal automobile market.”

The personal lines section of this text examines the impact of aging on your homeowners and automobile insurance needs. It discusses the special property and liability exposures you face after age 50, and gives suggestions regarding coverage’s you may need to increase, decrease, purchase, or eliminate altogether.

It shows you where you may be eligible for special discounts and preferred rates. It teaches you how to read your policy to tell what is covered and what is excluded, how underinsuring your property can cost you at the time of a claim, and the best ways to fill your gaps in coverage. And it helps you assess whether your policy limits are sufficient and how to protect yourself against “inside” limits. This is the important factor to look for insurance discounts for senior.

When you buy insurance, you enter into a contract with a much larger and more powerful entity than yourself: the insurance company. It only makes sense to be informed about the coverage you have purchased, understand your rights and responsibilities, and protect yourself from unnecessary losses. This becomes even more important as you get older and need to protect the assets you have accumulated.