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Tucson, Arizona 85704

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Oakley Insurance Group Blog

The What’s and Why’s of Insurance Rates

Why You Should Read On

Have you ever thought, “Insurance is a scam, and they’re just trying to take my money!” or “I hate insurance, rates are going up so much I can’t keep up with it!” OR “Insurance rates increase just because the companies want to make more money.”? Then this article is for you!

It’s High!

As you know, our nation has undergone massive changes and the economy has shifted over the last couple of years. As things are beginning to settle the prices of products, services, and labor are remaining. Here at our agency, we like to present transparency in communication to our customers, and potential customers. We thought it would be best to offer detailed information and explanations of why your insurance rates are likely increasing and place it here, on our blog in a central spot accessible to anyone.

One of the simplest comparisons we can provide is the experience when you go to the grocery store. The eggs you’re used to buying now cost more. The paper towels you’re used to buying now cost more. The fresh and frozen food costs more. Everything costs more. Just as your trip to the grocery store costs more so will the cost to repair or replace your car, your home and the items inside it. Over the last two years we’ve seen prices rise almost monthly in some places. Businesses such as stores and restaurants can increase prices as they see necessary when it is necessary. Insurance is different, because insurance is a contract, price increases can only occur after a completed process between insurance companies and the state, and after the contract between you and the insurance company has expired.

Raising Rates

Firstly, for an insurance company to raise rates in any given state their rate increase has to be justified and approved by each state’s insurance department. Since most of those reading this are going to be our clients in Arizona, your insuring company’s rate increase has to be approved by the Arizona Department of Insurance before those rates take effect. Secondly, your rate can only be increased or in rare cases decreased at the end of your policy period. Auto policies have a six (6) or twelve (12) month policy period, and homeowner’s policies have a twelve (12) month policy period; and rate changes can only occur after those periods. One way of mitigating constant rate increases for our customers is by always writing auto policies with a twelve (12) month period.

The State of The Industry

There are several reasons why rates are increasing. Financial loss is a factor in the insurance industry. In 2022 we know of only one company that did not lose money, but to our knowledge every other major carrier lost money. That financial loss now must be recuperated in the following years.

The cost of a standard claim in 2022 costs 50% more than the same claim in 2021. In our agency we have seen windshield replacements that used to cost $400 no cost over $1,000.

Ooo! Shiny!

Vehicles are more complex now, so replacing a windshield, or a side mirror isn’t simple. We had a client whose side mirror was knocked off their truck, and while on an older model vehicle you could just attach a replacement or go pick-a-part from the junk yard, that is no longer a possibility. This side mirror has motorized parts, sensory and camera equipment. The mirror has to be exactly the right mirror, and once installed had to under go calibration for the side camera’s and blind-spot warning sensors. Can you imagine the cost of repairing a Tesla?! I can recall a customer who owns a 2022 vehicle and whose rate is increasing by about $1,000 for the year, simply because it’s a brand-new vehicle, no claims, no accidents, just new and shiny.

Wait?! My Car Isn’t New!

So, as we move along through this information journey there are some elements that many people don’t realize factor into their premium. If you own a big F350 truck, your premium is likely to be much higher than a Honda Civic, and not just because it’s bigger. Larger and more powerful vehicles can do a lot of damage, and this factors into your premiums. If someone rearends a little smart car, it’s much more likely that car will be totaled, and the people inside could be injured. Whereas, if a large truck is hit by a Honda civic, it’s more likely that the truck will sustain a few scratches and maybe a small dent. Furthermore, if a small car runs into a wall or a building, the damage could be minimal, while a large truck would cause significant damage to the structure it collided with. Another cause of increased premium on an older vehicle may simply be the ease or difficulty obtaining replacement parts. Of course, we’re not referring to vintage or collector vehicles, but to vehicles older than five years for which parts may be hard to find.

The 3 C’s: Claims, Citations, and Credit

The three C’s are some of the biggest factors of rate increases, of which you have some control over.

Claims: Any claims made on your insurance policy can and usually do affect its premium. We often hear “My policy had full glass coverage, and I didn’t have to pay anything.” That may be true, but your insurance paid for it. The common misconception about insurance is that you can make a claim, and everything goes away. It may go away for you, but only temporarily. As previously mentioned, because you have a policy period your claim may not immediately effect your rate, but once that contract/policy period expires your rate can be increased so the company can recover the money spent to cover your claim. All claims are tracked, logged, and accessible to any insurance company. A central database managed by Lexus Nexus, and others, contains reports for all insurance claims filed for auto, home, liability, etc… When you search for new insurance a CLUE report is pulled, also referred to as a loss-run report, that searches this database for any claims made. If claims are found, the rate will increase, and will increase in respect to the age of the most recent claim(s), the amount paid for the claim(s), and any at-fault rating. Claims will affect rates for up to five (5) years, and each insurance company has their own rating schedule for how much a claim’s age will affect premium. If a claim was filed for an at-fault accident, the rate will be much higher than something like a glass claim. It is important to remember, that if you are in an accident that was not your fault, and another insurance company of the other party involved paid your claim, these do not count against you. They are logged, and tracked, but not counted against you.

There is also a common misunderstanding about glass coverage; while glass may be included with a $0 deductible, all glass claims are tracked, and multiple claims will begin to count against you. With the significant increase in cost to replace a windshield, companies have begun to make rate changes after one glass claim. You may be thinking “I can’t help that a rock pounded my windshield on the interstate!” While this may be true here are a few steps to mitigate risk and glass claims.

  1. Stop tailgating! So many people follow other vehicles way too close on the road. I’ve seen this happen down our main streets here in Tucson. People follow so close, and because of rain, monsoon season, dirt on the road, and simply construction loose gravel is flying everywhere. If you look at the tires of the person in front of you, you can usually see when gravel’s being thrown and can see how far back you need to be to avoid a windshield strike.
  2. Don’t follow behind larger vehicles. Following behind a van is usually okay, but large consumer diesel trucks usually sit high and allow passage of gravel from the road up and past their bumper on to your car. This goes without saying, don’t follow semitrucks on the interstate or stay back, and definitely don’t follow a dump or transport truck with debris in it.
  3. If your windshield is struck by debris and leaves a small star type crack, get that fixed as soon as possible so it doesn’t grow, and avoids a full windshield replacement.

A little bit more about claims. If you have filed a significant number of claims, even small one’s it is possible that your rate will increase and your application for coverage could be denied, or your current insurance company could choose not to renew coverage. Please remember that insurance is a contract that transfers financial risk from yourself to the insurance company, but the insurance companies will recover those funds regardless of which company you insure with. Therefore, if you can pay for a repair to your vehicle that isn’t being covered by someone else at fault, you don’t need to file a claim. It is more advisable to file a claim only if you are unable to pay for repairs or liability yourself.

Citations: Our next C is citations. Some people are wired differently and have a “lead foot,” a term used to illustrate that they tend to drive more aggressively and often faster than others. While getting somewhere quicker isn’t bad, breaking the law and driving in a way that endangers yourself and others, is. Just like claims, the MVD or in some places the DMV tracks any tickets or citation that a driver has received. When insurance quotes are generated a MVR (motor vehicle record) is pulled and any citations will show up. Just like claims, any citation will be retrieved and each insurance company will rate their premium based on the type of citation and its age. Any traffic violation will show up, from small parking tickets to DUI/DWI’s and reckless driving.

Credit: The last C is credit. Unfortunately, the United States lives in a state of “credit.” This means that if you have a lower credit score it can impact your insurance premium. Insurance companies do not use a hard credit pull, but a soft credit pull. The reason why insurance companies use a credit score for premium rating is to gauge financial responsibility. If there’s a good track record of paying bills and debts on time, you are more likely to pay your insurance premium on time, or in-full at the point of sale. Additionally, it has been shown that those with lower credit scores are more likely to file claims.


For those that own homes, you may notice your rates increase even though you haven’t filed a claim, and this is because the value of your home has increased. If you compare you last policy, to your most current (more expensive) policy, note your Coverage – A. You will see that last year the amount of coverage needed to rebuild your home was probably $50,000 or more less than this years, simply because the value of your home has increased. This value refers to the cost of material and labor it would take to rebuild the structure of your home, not your personal belongings inside of it. Since the amount needed to rebuild your home in case of total loss has increased by thousands of dollars, the rate will increase to match that extra level of coverage.

You Sue Me? I’ll Sue You!

This wasn’t on our radar as a reason why rates are increasing until we received a published article from one of our insurance companies. Factors called Social Inflation are driving up rates. Social inflation is basically the impact of social dynamics amongst members of society through public and social media which are desensitizing people to “numbers.” Numbers referring to large sums of money. From 2015 to 2020 the median cost of a jury award over $10 million increased by 35%, from $20 million to $27 million. People are seeing these large sums being awarded, class action lawsuits, unprecedented lottery prize winnings, or even celebrity salaries and these numbers are driving up costs because of the desensitization to the value of money. When people are in accidents whether vehicle related or not, they are becoming greedy. People are no longer seeking coverage of medical bills, and cost of living while they recover, but they are seeing punitive damages simply because they’ve been inconvenienced or are filled with greed and opportunity.

In Summary

To summarize, though it may feel like insurance isn’t doing you a favor, and that rates are being raised willy-nilly, neither of those are true. Insurance is heavily regulated in the United States, and through state laws vary, you still need insurance to cover what could be exponential costs in the case of a loss or at-fault accident.

Thank you for reading!

Author: Micaiah – Oakley Insurance Agent – Agency Marketing and Development

What You Need To Know: Umbrella Insurance

What Is An Umbrella Policy?

Despite how it sounds, an umbrella policy isn’t to insure your rain umbrellas if they’re destroyed in a heavy storm. An umbrella policy is a fallback of extra liability coverage if any underlying liability coverage is exhausted. Insurance policies contain a liability portion that is used if you are legally found responsible for injury to someone, directly or indirectly. Auto insurance is the easiest example to use; if you rear-end someone because you were following to close and they had to stop quickly, you are at fault and are liable for any bodily injury to the other person(s) in the vehicle you rear-ended – this would be an indirect bodily injury. Direct bodily injury would be like striking a pedestrian because you didn’t see them crossing the street.

Underlying Coverage

Underlying coverage is the term used in an umbrella policy to denote how much liability coverage is included in other polices that you have, such as Personal Auto Insurance, Homeowner’s Insurance, Boat or Watercraft Insurance, Recreational Vehicle Insurance, etc…

When examining your existing policies, you’ll find a limit of liability and it is important to understand what is contained within the limit of liability. Most auto policies are laid out in a up-to per-person limit and an up-to per-occurrence limit, such as 250/500. Interpreted this means there is personal liability coverage for bodily injury of up-to $250,000 per-person, and up-to $500,000 per-occurrence/accident. Furthermore, using the auto accident as our example, if you strike a car with a single person – the driver, your policy will pay up to $250,000 to the injured person to help pay for medical bills and any court ordered liabilities. If you strike a car that has six people in it, then your policy will pay up-to $250,000 per person, but only a maximum of $500,000 for the accident, so in a way the $500,000 is split between the six people with a maximum of $250,000 paid to any single person, but a maximum of the $500,000 will be paid out for the entire bodily injury claim.

Umbrella Coverage

Continuing with the last paragraph, this is a good example to illustrate when an umbrella policy would be used. In the case of the six injured persons in an accident for which you are at fault, and a limit of only $500,000 (when split, less than $100,000 per person) that amount of money can disappear quickly, especially if someone in that vehicle doesn’t have medical insurance. If you have an umbrella policy, most of which start at an additional one-million in coverage, and you have exhausted the underlying policy liability limit (in this case $500,000), your umbrella policy will “kick in.” Regardless of the policy, once the underlying liability limit has been exhausted, your umbrella will begin to pay out for the rest of your liability for a given claim. As an example, if the cost of the six-person claim is $900,000, the first $500,000 will be paid by your underlying auto liability coverage and the remaining $400,000 will be paid by your umbrella policy.


Like all insurance policies, there are requirements and limitations to purchasing and maintaining an umbrella policy. Most, if not all companies that issue umbrella polices have a minimum required underlying liability limits. This means that the companies require you to have a certain limit of liability in your existing policies. This means you can’t have an Arizona state minimum liability of $25,000 and have an umbrella pick up the rest. Most companies issuing an umbrella policy will require that your underlying policies have a minimum liability level of up-to $250,000 per person, up-to $500,000 per occurrence.

Legal Limitations

Just like all insurance policies, there are legal limitations to coverage, and what your insurance policies can be used for. Any intentional losses (fraud) will not be covered. Any losses resulting from illegal activity will not be covered.

Contact Us

If you have any questions, concerns, or would like to know what an umbrella can do for you and your family please contact us. You can submit a question through our website and on our social media accounts “oakleyinsurancegroup”; and by phone (520) 887-5555

Author – Micaiah Bennett – Agent

What You Should Know – Part 1 | Homeowners’ Insurance – Part 1

Purchasing a home is a major achievement and a great milestone in life whether its your first or not. Owning a home is a great responsibility in may ways. Homeowners’ insurance was developed to help with the financial responsibility of a home if anything were to happen to the structure, or personal property contents in the home. As an independent professional insurance agency we work with clients every day to make sure the coverage on their home and property is sufficient for events that may occur that could render your home or property damaged, or destroyed. Below, as the first part of our “What You Should Know” series, we are going to highlight some major pieces and information about a homeowner’s policy.

Know Your Policy

What Is Homeowners’ Insurance?

Homeowner’s insurance is a product developed to cover the structural parts of your home and the personal property you own. It is important to know what this coverage is designed to do, and why. Home insurance is divided in to a few main parts to cover the structure itself, other structures part of your home, the contents in the home, resources to use in the event you are displaced from the home, and possible legal liability. We will separate these coverages and provide more detail about what they are, and what they cover. Keep in mind, by default, these coverages only apply to non-business use structures and property.

Coverage A – Dwelling

The dwelling portion of the home is the part of the house you live in – the roof you sleep under, and any part physically attached to it, such as a garage. In your homeowners’ policy you will notice the label “Coverage A” and you will see a dollar amount. This dollar amount is the limit or the maximum your insurance will payout in the event of a covered loss. The dwelling amount is the calculated rebuild value of the home based off the information provided from multiple sources of what the home is made of. Details such as the foundation type, what the walls are made of, the coating on the outside of the walls, the structure type and material type of the roof, the age of the home, the last time any major updates or remodels were made, how many bedrooms and bathrooms, how much and what type of flooring material is used throughout the home, and many other aspects all factor into the premium price of coverage. Another easier way to think about this dwelling coverage is, if the home were to be completely destroyed, what would it would cost in labor and materials to rebuild it? Remember this Coverage A, because you will see it referenced in other parts of your policy.

Coverage B – Other Structures

Just like Coverage A, you will see Coverage B in your policy documents, and a dollar amount listed. This dollar amount is the limit or maximum the policy will pay for other structures in the event of a covered loss. Other structures of the home are those not attached to the main dwelling. This could include a shed, a garage, carport, a casita (detached small house/guest house), a swimming pool, and even a built-up outdoor barbeque area. Since the coverage can vary based on the amount of other structures, the policy limit begins set as a percentage of Coverage A, usually 10%. However, if needed, a custom amount greater than 10% can be entered for the coverage of other structures. Although this amount is calculated from Coverage A, the amount paid out for other structures does not lessen the limit payable for Coverage A.

Coverage C – Personal Property

You will see Coverage C in your policy documents, and a dollar amount listed for it. This dollar amount is the limit or maximum the policy will pay for your personal property in the event of a covered loss. Your personal property is exactly that, your personal property or the contents of your home. I like to think of it this way, the structure around you is the house, but your items inside the house make it home. Another way to think about it is, if you were to flip the house upside down, anything that fell free is your personal property. Personal property are things like your furniture, appliances, clothing, electronics, paintings, mirrors, etc… The payout limit for Coverage C by default is calculated as 50% of Coverage A. However, if needed, a custom amount greater than 50% can be entered for coverage of your personal property. Although this amount is calculated from Coverage A, the amount paid out for your personal property does not lessen the limit payable for Coverage A.

Coverage D – Loss of Use

You will see Coverage D in your policy documents, and a dollar amount listed for it. This dollar amount is the limit or maximum the policy will pay in the event of a covered loss. Loss of use coverage is an amount of insurance available to use toward cost of living in the situation that you are displaced by an event that was covered by your insurance. You could be displaced because a tree fell through the house and can not be lived in until the roof is fixed. Or, you could be displaced because a fire completely destroyed the home. For coverage to apply the home must be inhabitable. Loss of use coverage will pay for a place to stay, food, transportation, and laundry services until your home is suitable to live in again, or you have found a new permanent home. The limit for Coverage D is calculated as 30% of Coverage A. However, if desired, a custom amount greater than 30% can be entered for loss of use coverage. Although this amount is calculated from Coverage A, the amount paid out for loss of use coverage does not lessen the limit payable for Coverage A.

Coverage E – Liability

An often overlooked part of homeowners’ insurance is the liability coverage section, also labeled Coverage E. Liability coverage is used to cover yourself on or off your property if you are found liable for bodily injury or property damage to someone else. You may be liable for events directly or indirectly. Examples of direct responsibility would be someone tripping in your house because you left something on the floor, or someone hits their head on a hanging light fixture you forgot to warn them about. Indirect responsibility could be a tree branch falling from your yard damaging your neighbor’s bike, or your dog biting a visitor. You can also be found liable for activities away from the home like leaving a shopping basket on the floor at a store while looking at products on the shelf and some falls over that basket. Liability coverage is essential for protecting yourself from suits that could pursue things you own and even garnish wages. The limit for Coverage E is chosen by you at the purchase of the insurance policy, beginning at $100,000.

The Exclusions. Exlus-me?! Inclusions Too.

If you are like most people, you haven’t read your home insurance policy documents to know what is excluded from coverage. While different “base” policies have different coverages and exclusions, Oakley Insurance Group has agency default policy types for homeowner coverage. A few main exclusions you will see are:

  • War or acts of war, including undeclared war or civil war
  • Neglect – such as failure to preserve property during or after a loss
  • Water Damage, including internal and external flood
  • Earth Movement including earthquake, mudslide, sinkhole, and subsidence (additions can be made to cover these risks)
  • Power Failure – off residence premises
  • Ordinance or Law – if construction or reconstruction of property is demanded by laws or ordinances
  • Intentional Loss
  • Nuclear Hazard
  • Governmental Action – such as the destruction, confiscation, or seizure of property by government or public authority
  • Loss to Property – such as faulty zoning, bad repair workmanship, faulty construction materials, and defective maintenance

The exclusions above may seem like a lot, but here are common inclusions of coverage with out the need for additions to the policy. Damage due to:

  • Wind
  • Civil Commotion
  • Smoke
  • Hail
  • Aircraft (non-owned/operated)
  • Vehicles (non-owned/operated)
  • Volcanic Eruption
  • Explosion (internal and external)
  • Riot
  • Vandalism
  • Malicious Mischief
  • Theft
  • Burglary Damage
  • Ice, Sleet, Snow (the weight of)
  • Glass Breakage
  • Accidental discharge of water from plumbing, heating, air conditioning, fire sprinklers, or household appliance (non flood)
  • Freezing of plumbing, heating, air conditioning, fire sprinklers, and household appliances (care must be made to prevent freezing)
  • Falling Objects
  • Electrical Current (power surge)
  • Collapse
  • Tearing Asunder – the sudden, unexpected, and accidental tear apart, cracking, or burning of heating, air conditioning, fire sprinklers, and water heater.

Whew, I know that is a lot of information, but it is all very important to know and understand when accepting your homeowners’ policy. There will be more information to come in Part II of “What You Should Know – Homeowners’ Insurance”.

Remember, this information is for customer education only, and is not binding or contractual in purpose or meaning. It is essential that you take the time to sit down with our agents and review your coverage and coverage options so we can make sure you are covered for unexpected events life sometimes brings.

Thank you for reading! – Oakley Insurance Group – Tucson, Arizona | | (520) 887-5555

Additional Information

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