When Your General Liability Insurance Cost Exceeds Limits

General liability insurance costs can become overwhelming if you have a high number of claims, low deductibles or high exposures. Depending on whether your general liability insurance is for your home, business or automobile, you will need to take a different course of action to resolve the issue. If you do not resolve the issue, your cost for insurance may exceed your limits, meaning the insurance is serving no purpose at all. Filing a claim for the entire limit of your policy would still not cover the cost you have incurred that year in premium. Taking steps to reduce the cost is a better solution than cancelling your insurance all together. 

Reducing Claims

The first step to reducing your insurance cost is reducing the amount of claims you file next year. You can come up with strategies for doing this by creating a review of all the claims you filed in your previous policy period. Liability insurance providers can easily compile a summary for you if you do not have one for your records. Review the sheet to see which claims you made, and then determine which of these you could have paid for out of pocket. You can determine this based on your income, savings and financial strength. Decide to pay all claims under a certain amount yourself in the next policy period. 

Raising Deductibles

Just as you may have decided to pay some of your claims out-of-pocket, you can also decide to raise your deductible based on your financial stability. Your deductible is the amount you will be responsible on each claim or on each policy. Raising this will typically result in a lower premium. Only do this if you determine you can afford to pay the deductible.

You should also be able to meet the deductible fairly easily. This means you should ensure your claims for previous policy periods have a minimum above the deductible. It is best to aim for a deductible that is, on average, 50% of your claim or total claims. Your insurance will then pick up about half of your total expenses.

Managing Exposures 

There may also be a chance that you could have avoided a claim all together by acting in a different way. For example, an auto insurance claim for bodily injury liability insurance may result after you negligently drive your car. Taking a safe drivers course or being more careful on the road can reduce the likelihood of this type of claim next year.

Managing exposures in business insurance is also possible. You can create a more detailed employee handbook to inform your associates about how their actions may cost money in claims. This means creating and explaining policies on sexual harassment, employment practices and even contract errors & omissions. Your liability insurance covers claims that result from law suits due to negligence. Reducing the possibility for negligence can manage your exposure to liabilities.


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