July 8, 2025 • 16 mins
Recently, Premiums Appear To Be Going Up Across The Board - Why Is That Happening?
The mystery of skyrocketing insurance premiums finally explained! Licensed insurance agent Timothy Walters cuts through the confusion to reveal why your coverage costs keep climbing—and no, it's not just your agent trying to squeeze more money from you.
Behind every premium increase lies a complex web of economic forces. First, there's the unavoidable reality of inflation. When your car needs repairs after an accident or your home requires rebuilding after a disaster, those costs have increased dramatically year over year. Insurance companies must adjust premiums accordingly just to keep pace with these escalating expenses.
The conversation takes a fascinating turn as Timothy explains how population growth and development patterns have transformed previously vacant land into dense housing communities—often in disaster-prone areas. What once might have been a tornado destroying a barn now becomes a catastrophic loss of multiple million-dollar homes. Meanwhile, insurance carriers, operating across state lines and even internationally, must absorb losses from wildfires in California, hurricanes in Florida, and floods in the Midwest, spreading those costs across their entire customer base.
Perhaps most revealing is Timothy's explanation of how reinsurance (insurance for insurance companies) and state regulations create a domino effect that ultimately reaches your wallet. When states prevent carriers from charging realistic rates while mandating coverage for high-risk properties, companies eventually exit markets entirely—leaving fewer options for consumers and higher prices from those who remain. Through it all, Timothy offers practical advice for working with your agent during these challenging times, emphasizing that approaching the conversation constructively yields better results than confrontation.
Ready to better understand your coverage options and potentially find savings despite market conditions? Call The Walters Agency at 423-417-2070 for a free consultation.
To learn more about The Walters Agency visit:
https://www.brightway.com/agencies/tn/knoxville/0237/team
The Walters Agency
7009 Asheville Hwy
Knoxville, TN 37924
423-417-2070
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to the Walters Agency podcast, where
insurance meets peace of mind.
Hosted by licensed insuranceagent and owner, timothy Walters
, we're here to help families,homeowners and small business
owners throughout East Tennesseeprotect what matters most Our
mission creating win-win-winsolutions for insurance.
Let's dive in.
Speaker 2 (00:33):
It's not just you.
Insurance costs are climbing,but it's not random and it's not
necessarily somebody else'sfault.
In this episode we dig into themacro forces driving up rates
and what it means for everydayfolks trying to stay covered.
Welcome back everybody.
Skip Monaco is producer back inthe studio with licensed
(00:53):
insurance agent and owner of theWalters Agency, mr Timothy
Walters.
Timothy how's it going?
I'm doing just fine.
Doing just fine, although I'm alittle stressed about my
insurance premiums going up andI know we've talked a little bit
about this, about what you cando in previous episodes to
mitigate some of that, but itseems like recently they're
(01:16):
really climbing, and you knowwhy is that happening from your
perspective?
Speaker 3 (01:22):
Well, no, it's like everything else.
There's a thousand factors thatgo into insurance races, like
there's a thousand factors thatgo into the price of any product
or service on the market.
Speaker 2 (01:33):
Yeah.
Speaker 3 (01:34):
Yeah, yeah, I don't know.
I mean, if maybe you can findme an insurance dues and hatch
them out at the house orsomething, I don't know.
But uh, I have some homegrownstuff, I don't know.
It know, but, uh, I have somehomegrown stuff, I don't know,
that wouldn't work because Idon't think I'd get insurance on
my house if I had a goose.
Think about it.
But uh, yeah, I mean, there's alot of factors and is what I
tell people is, literally thereare I mean, really are a
(01:55):
thousand factors that go intothe price of insurance and again
, the general trend is is up andthe insurance rates are going
to continue to go up by andlarge.
You know you're going to seeplateaus and temporary dips and
everything.
But because one of the majordriving factors is inflation
I've talked about this beforelike everything else, you know,
(02:17):
the dollar buys less every day.
It seems like, you know, I kindof ask people to think of it
like this.
You know, when they're angryabout their insurance rates
going up, I understand that.
But think of it this way If youhave a loss, if you wreck your
car, and the insurance willcover the damage to the car,
isn't it cost more or less tomake the same repairs to the car
(02:41):
now as opposed to this timelast year.
Most of the time it's going tobe more.
I mean we all know that that'skind of inescapable.
So of course the insurancecompanies are going to have to
cost.
You know they have to chargemore to the clients to help
cover that spread becausethey're dealing with, in some
cases, millions and millions ofclients, thousands and thousands
(03:02):
of claims.
I mean they're dealing with bignumbers.
So they have to make thoseadjustments or else they're
going to go bankrupt.
I mean, that's just economics,okay.
Same with homeowners insurance.
It's going to cost more to makea repair to damage to your
house now, today, in 2025, thanit would have this time last
(03:23):
year, in 2024 and the yearbefore that and the year before
that.
So that's the inflation effect.
That's a big one.
It's not the only one, ofcourse people don't think about
this.
Insurance is veryinterconnected.
Most insurance companies arelarge interstate or even
international corporations.
They cover risks across theentire United States, most of
(03:47):
them, or even United States andCanada.
Some of them are literallyglobal.
They have interests in wholeother continents.
I don't know if anybody's beenwatching the news, but
hurricanes, fires, naturaldisasters of all sorts have been
causing a lot of damage,partially because there are
people living in places thatthey didn't used to live.
(04:08):
We see that here in Tennessee,especially in middle Tennessee.
I've noticed where towns thatused to be small, like Cookville
, where my cousin grew up he wasa realtor, awesome guy, asked
me about his information if youwant to buy or sell a house my
cousin grew up, he was a realtor, awesome guy Asked me about his
information if you want to buyor sell a house.
Played you in Bill.
But Cookville has blown up inthe last 15 years.
It's exploded, went out throughthere last year I didn't even
(04:31):
recognize the place.
So there are these condos,houses, top-packed housing
communities in places that usedto be cow fields, right, so the
tornadoes will come throughthere where the same place they
used to hit and maybe they blowaway a cow on a fence or knock
down a barn or something likethat.
Well, now they're damaging insome cases billion-dollar homes,
(04:55):
because it costs a milliondollars to buy a home in
Tennessee.
It seems like now.
So a lot of this.
Like I said, people are livingaround in California.
They built in the desert inthese fire traps and are
surprised when they burn down,also when they don't have any
water or on a hillside andsurprised when there's a
mudslideRight, exactly.
So all this stuff is going on.
(05:16):
A lot of the losses, I think,are being driven by
overdevelopment areas wherethere used to be these weather
events where there wasn't a lotof damage incurred, but the
insurance companies are stillpaying for it.
So the retail insurancecompanies a lot of times are
operating on a loss.
So they're actually paying outmore in claims and overhead
(05:37):
because they got to pay theiremployees, they got to pay for
all the things they got to payfor to actually conduct business
.
So a lot of times they'reoperating at a loss the last
five or 10, 15 years.
So they have a thing calledreinsurance.
And what a reinsurance companyis?
It's insurance for theinsurance companies.
So if an insurance company, youknow ends up you know operating
(05:58):
at a loss, you know on a year,the reinsurance company pays
them.
You know ends up, you knowoperating at a loss, you know on
a year, the reinsurance companypays them.
You know, basically, thedifference to keep them in
operation, keep them from goingunder.
And reinsurance companies havebeen paying a lot of money, a
lot of money globally, billionsand billions of dollars, over
the last you know five or 10years especially.
So they're having to raisetheir rates and economics 101,
(06:21):
everything rolls downhill.
In the end, the individualclient, the individual consumer
is the one who is going to haveto pay for those increases
Because, again, that's the onlyway it can work.
That's economics.
It's not spite.
It's not because the insurancecompanies are necessarily greedy
, as a lot of people like to say.
(06:42):
They're literally just tryingto conduct business in a way
that they can stay in businessand hopefully make a profit.
And this is America.
Profits shouldn't be a badthing because it allows for
other things to happen.
But, yeah, those are two bigdriving factors I think that
people don't think about,because it affects both the home
and the auto markets and, again, that's not something that a
(07:03):
lot of people think about.
Speaker 2 (07:04):
Well, especially the overpopulation centers growing.
I used to live in Murfreesboroand south of Nashville and when
I lived there there was 50-.
Speaker 3 (07:14):
Beautiful little town .
Speaker 2 (07:15):
It used to be a little town.
There was 55,000 people therewhen I lived there.
There's now 55,000 people there.
When I lived there there's now150 or 160,000 in the city of
Murfreesboro.
So I could imagine yeah, I wassurrounded and that's Tornado
Alley too.
I mean, tornadoes have alwayscome through there, you know, up
through Alabama into Tennessee.
But well, speaking of Tennessee, the states like Tennessee,
(07:41):
north Carolina and Virginia, dothey have any say-so over how
quickly or steep premiums canrise as a regulations on that?
Speaker 3 (07:47):
Yeah, no, Insurance is one of the most heavily
regulated businesses in thecountry.
A lot of people don't realizethat when they yell at me about
their insurance premiums.
a lot of times the state, andagain this varies by state to
state.
Insurance is primarilyregulated at the state level.
The feds don't have a whole lotto do with it right now anyway.
(08:07):
So yeah, state regulations canabsolutely have a major effect
on rates, some states likeCalifornia, for instance.
So let's use them as an example.
The government likes to winbrownie points with the voters
by saying by saying we're goingto put these greedy insurance
companies in their place andwe're not going to let them
raise their prices Again, pricesin a free market.
(08:31):
They kind of hit supply anddemand thing where the company
that's doing the business has tomake enough money to stay in
business, at least break even ifnot make a profit.
Has to make enough money tostay in business, at least, you
know, break even if not make aprofit.
Otherwise why are you doing it?
And some states basically forcethe insurance companies to one
(08:53):
accept risks that they wouldn'taccept otherwise.
You know, maybe they say youhave to accept this home that's
falling apart, you know, intoyour insurance program, or this
home that's in a high risk areathat is clearly going to burn
down the next time there's afire X, y and Z, you have to
take those risks and then, oh,also, we're not going to allow
you to raise your rates, for Ithink in California's case they
went like five years withoutallowing the insurance companies
(09:15):
to effectively increase theirrates across the board, like
they were needing to.
So that causes insurancecarriers to begin exiting
markets because, if they'regoing to be, they know
something's going to happen andthat they are not making enough
money to have a reserve of cashto effectively absorb that kind
of loss.
So they started exiting themarket.
(09:37):
Famously, state Farm leftCalifornia.
Basically right before that bigfire last year.
Everybody was mad.
But State Farm, they realizedlike, look, they knew all the
factors, the fact that they wereallowing these homes to be
built in areas that were in thedesert.
They were not clearing out thebrush, they had demolished the
(09:58):
dams that had previously hadreservoirs for the water.
They weren't keeping reservoirsof water in the city.
Listen, the insurance companies.
These are multi-billion dollarcompanies.
They understand, they track allof that.
They have connections togovernment, they know what's
going on and since Californiaput them in a position where for
(10:18):
years they hadn't been able toincrease their rates or manage
their risk portfolio effectively, they're like you know what
peace out, we're going to haveto exit stage right, and they
did.
And then California came outafter the fire and tried to
retroactively make them pay forall those losses.
I think that's still in court,if I'm not mistaken.
(10:39):
So that's just one example,there's other states, like
Tennessee is actually not a badstate as far as insurance
regulation.
I think they kind of have apretty good balance of
protecting the individualconsumers and also looking after
the business interests, youknow, making sure that companies
can operate effectively.
I think Tennessee is actuallyone of the better states as far
as regulation is concerned, butwe're still tightly regulated.
(11:00):
I mean it's a thing that wehave to deal with.
Speaker 2 (11:02):
What about North Carolina?
Speaker 3 (11:05):
I don't really know that much about North Carolina.
I'm not licensed in NorthCarolina.
I could probably I know a lotof North Carolina agents, so if
we ever do one of your podcastswhere they talk about North
Carolina, I'd be happy to bringsomebody on, but I really
wouldn't be able to effectivelyspeak about North Carolina
specifically.
Like I said, it's very much astate-specific subject.
(11:25):
All the different states havedifferent regulations and laws
governing different insuranceproducts.
Speaker 2 (11:30):
Well, if I had to guess, I would say North
Carolina is more heavilyregulated than Tennessee because
Tennessee generally with incometax and is less regulatory.
I would think.
Speaker 3 (11:42):
Yeah, I mean it may be like I said.
I know North Carolina isprobably a little bit more of a
regulatory state than Tennessee,but you never know.
Sometimes you get surprised byhow states govern things.
Speaker 2 (11:55):
True, I know our sales tax is higher, but I'm
originally from North Carolinaand love the no income tax and
when you buy a car there youmight want to step across the
line.
Speaker 3 (12:08):
Oh yeah, yeah, no.
Yeah, I've never actuallybought a vehicle outside the
state of Tennessee, but I'veheard that some of the taxes for
transfers and title and thatkind of thing can be pretty
crazy.
Oh yeah.
Speaker 2 (12:24):
Love the gas price, though.
I just traveled throughVirginia and I was like man, I
can't wait to get back toTennessee where I can spend 40
cents to 50 cents less thanGallup Virginia's a beautiful
state.
Speaker 3 (12:35):
It's a little weird though, like I said, I really
hate the fact that it is soweird because it is one of the
most beautiful states I've everbeen to.
But they're definitely a littlekooky on some things in my
opinion.
But, like I said, I guessthat's why I'm a native
Tennessean.
I don't have plans to liveanywhere else unless Knoxville
(12:55):
comes out and eats us.
Then I might have to move toKentucky.
Who knows what the future isgoing to bring.
Speaker 2 (13:03):
That's right.
Thankful to be in Tennessee andthankful that we're regulated
less, especially on theinsurance front, but on a lot of
different fronts.
Timothy, appreciate yourclarity on premiums and why
they're going up A lot to thinkabout.
That isn't necessarily justyour evil insurance agent's
fault.
It's the matter of what's goingon in the world.
Speaker 3 (13:22):
I mean behind my eyebrows and my mustache.
Speaker 2 (13:25):
Appreciate you helping us to feel a little less
overwhelmed by why the costsare rising.
Speaker 3 (13:34):
Like I said, anybody who's watching this.
Like I said, I understand thefrustration.
You know my best advice to youwhen you talk to your agent,
just understand that your agenthas no controllable rates.
Those are set by the individualinsurance companies and the
state that regulates the product.
Our job as agents is to try tohelp our clients in the best way
we can.
If you talk to your agent andbe like hey, listen, you know my
(13:55):
insurance rates have gone uptwice in the last two renewals.
Can you shop it for me?
A hundred percent, I'm sure,like they'll be happy to do that
for you.
Sometimes they can find a lessexpensive rate with same or
better coverage.
Sometimes they can't.
Sometimes they might with sameor better coverage, sometimes
they can't.
Sometimes they might come backand tell you say, listen, as far
as our markets are concerned,this is the best place for you.
(14:17):
And what I tell people, I sayif it really is more than you
can handle right now, we don'thave all the markets.
There are other agents outthere who might have different
markets.
Or there are captive insuranceagents out there.
You know, like the big namesfarm bureaus, state farms, what
have you?
You can always check with them.
I want people to do what's bestfor them.
Not saying I want people toleave because this is how I make
(14:39):
my living, but most good agentsthat I know really do try to do
the best for their clients.
But if you come at somebody andjust like dump on them, it's
like you know, treat them likeit's their fault, like it's they
did this to you specifically onpurpose.
That's not true.
And again the old adage youtend to win more friends with
sugar than spice, right?
(15:01):
So people will tend to workharder for you if you approach
them in a reasonable manner.
That is, not just screaming atthem, cussing them out and I've
had people do this to me, likeright out the door, where they
even tell me who is calling.
You know, f-bomb this, you this.
And then I find out thatsomebody called me because their
insurance went up.
You know $15 a month.
(15:21):
And I'm like, okay.
I'll shop you, but you might goto the back of the line.
And again, as I said, I try tobe straight up.
That's the line.
And again, as I said, I try tobe straight up.
That's the truth, that's humannature.
So just put that out there foranybody who's watching this,
who's about to blow theirinsurance agent's ear off
because they're a random number,let's consider that before you
make that call.
Speaker 2 (15:41):
Absolutely, and if any of our listeners happen to
have an insurance agent that youtalk to, which we always give
advice Tim does to talk to youragent and you do and you don't
feel like they're working inyour best interest, call
423-417-2070, and this guy righthere will take care of you.
Speaker 3 (16:00):
Right, we'll take a swing at it.
No guarantees, but we'll try itout, there you go, straight
shooter.
Speaker 2 (16:06):
Well, tim, thanks again and we'll catch you in the
next episode.
Speaker 3 (16:11):
Thank you Skip Appreciate it.
Speaker 2 (16:12):
Yes, sir, thank you.
Have a great weekend.
Speaker 3 (16:15):
You too bud.
Speaker 1 (16:20):
That's a wrap on this episode of the Walters Agency
Podcast.
Ready to find the rightcoverage for your home, business
or family?
Call or text 423-417-2070 for afree 20-minute consultation.
Until next time, stay covered,stay protected and keep winning
(16:40):
with the Walters Agency.
Welcome to the Walters Agency podcast, where
insurance meets peace of mind.
Hosted by licensed insuranceagent and owner, timothy Walters
, we're here to help families,homeowners and small business
owners throughout East Tennesseeprotect what matters most Our
mission creating win-win-winsolutions for insurance.
Let's dive in.
Speaker 2 (00:33):
It's not just you.
Insurance costs are climbing,but it's not random and it's not
necessarily somebody else'sfault.
In this episode we dig into themacro forces driving up rates
and what it means for everydayfolks trying to stay covered.
Welcome back everybody.
Skip Monaco is producer back inthe studio with licensed
(00:53):
insurance agent and owner of theWalters Agency, mr Timothy
Walters.
Timothy how's it going?
I'm doing just fine.
Doing just fine, although I'm alittle stressed about my
insurance premiums going up andI know we've talked a little bit
about this, about what you cando in previous episodes to
mitigate some of that, but itseems like recently they're
(01:16):
really climbing, and you knowwhy is that happening from your
perspective?
Speaker 3 (01:22):
Well, no, it's like everything else.
There's a thousand factors thatgo into insurance races, like
there's a thousand factors thatgo into the price of any product
or service on the market.
Speaker 2 (01:33):
Yeah.
Speaker 3 (01:34):
Yeah, yeah, I don't know.
I mean, if maybe you can findme an insurance dues and hatch
them out at the house orsomething, I don't know.
But uh, I have some homegrownstuff, I don't know.
It know, but, uh, I have somehomegrown stuff, I don't know,
that wouldn't work because Idon't think I'd get insurance on
my house if I had a goose.
Think about it.
But uh, yeah, I mean, there's alot of factors and is what I
tell people is, literally thereare I mean, really are a
(01:55):
thousand factors that go intothe price of insurance and again
, the general trend is is up andthe insurance rates are going
to continue to go up by andlarge.
You know you're going to seeplateaus and temporary dips and
everything.
But because one of the majordriving factors is inflation
I've talked about this beforelike everything else, you know,
(02:17):
the dollar buys less every day.
It seems like, you know, I kindof ask people to think of it
like this.
You know, when they're angryabout their insurance rates
going up, I understand that.
But think of it this way If youhave a loss, if you wreck your
car, and the insurance willcover the damage to the car,
isn't it cost more or less tomake the same repairs to the car
(02:41):
now as opposed to this timelast year.
Most of the time it's going tobe more.
I mean we all know that that'skind of inescapable.
So of course the insurancecompanies are going to have to
cost.
You know they have to chargemore to the clients to help
cover that spread becausethey're dealing with, in some
cases, millions and millions ofclients, thousands and thousands
(03:02):
of claims.
I mean they're dealing with bignumbers.
So they have to make thoseadjustments or else they're
going to go bankrupt.
I mean, that's just economics,okay.
Same with homeowners insurance.
It's going to cost more to makea repair to damage to your
house now, today, in 2025, thanit would have this time last
(03:23):
year, in 2024 and the yearbefore that and the year before
that.
So that's the inflation effect.
That's a big one.
It's not the only one, ofcourse people don't think about
this.
Insurance is veryinterconnected.
Most insurance companies arelarge interstate or even
international corporations.
They cover risks across theentire United States, most of
(03:47):
them, or even United States andCanada.
Some of them are literallyglobal.
They have interests in wholeother continents.
I don't know if anybody's beenwatching the news, but
hurricanes, fires, naturaldisasters of all sorts have been
causing a lot of damage,partially because there are
people living in places thatthey didn't used to live.
(04:08):
We see that here in Tennessee,especially in middle Tennessee.
I've noticed where towns thatused to be small, like Cookville
, where my cousin grew up he wasa realtor, awesome guy, asked
me about his information if youwant to buy or sell a house my
cousin grew up, he was a realtor, awesome guy Asked me about his
information if you want to buyor sell a house.
Played you in Bill.
But Cookville has blown up inthe last 15 years.
It's exploded, went out throughthere last year I didn't even
(04:31):
recognize the place.
So there are these condos,houses, top-packed housing
communities in places that usedto be cow fields, right, so the
tornadoes will come throughthere where the same place they
used to hit and maybe they blowaway a cow on a fence or knock
down a barn or something likethat.
Well, now they're damaging insome cases billion-dollar homes,
(04:55):
because it costs a milliondollars to buy a home in
Tennessee.
It seems like now.
So a lot of this.
Like I said, people are livingaround in California.
They built in the desert inthese fire traps and are
surprised when they burn down,also when they don't have any
water or on a hillside andsurprised when there's a
mudslideRight, exactly.
So all this stuff is going on.
(05:16):
A lot of the losses, I think,are being driven by
overdevelopment areas wherethere used to be these weather
events where there wasn't a lotof damage incurred, but the
insurance companies are stillpaying for it.
So the retail insurancecompanies a lot of times are
operating on a loss.
So they're actually paying outmore in claims and overhead
(05:37):
because they got to pay theiremployees, they got to pay for
all the things they got to payfor to actually conduct business
.
So a lot of times they'reoperating at a loss the last
five or 10, 15 years.
So they have a thing calledreinsurance.
And what a reinsurance companyis?
It's insurance for theinsurance companies.
So if an insurance company, youknow ends up you know operating
(05:58):
at a loss, you know on a year,the reinsurance company pays
them.
You know ends up, you knowoperating at a loss, you know on
a year, the reinsurance companypays them.
You know, basically, thedifference to keep them in
operation, keep them from goingunder.
And reinsurance companies havebeen paying a lot of money, a
lot of money globally, billionsand billions of dollars, over
the last you know five or 10years especially.
So they're having to raisetheir rates and economics 101,
(06:21):
everything rolls downhill.
In the end, the individualclient, the individual consumer
is the one who is going to haveto pay for those increases
Because, again, that's the onlyway it can work.
That's economics.
It's not spite.
It's not because the insurancecompanies are necessarily greedy
, as a lot of people like to say.
(06:42):
They're literally just tryingto conduct business in a way
that they can stay in businessand hopefully make a profit.
And this is America.
Profits shouldn't be a badthing because it allows for
other things to happen.
But, yeah, those are two bigdriving factors I think that
people don't think about,because it affects both the home
and the auto markets and, again, that's not something that a
(07:03):
lot of people think about.
Speaker 2 (07:04):
Well, especially the overpopulation centers growing.
I used to live in Murfreesboroand south of Nashville and when
I lived there there was 50-.
Speaker 3 (07:14):
Beautiful little town .
Speaker 2 (07:15):
It used to be a little town.
There was 55,000 people therewhen I lived there.
There's now 55,000 people there.
When I lived there there's now150 or 160,000 in the city of
Murfreesboro.
So I could imagine yeah, I wassurrounded and that's Tornado
Alley too.
I mean, tornadoes have alwayscome through there, you know, up
through Alabama into Tennessee.
But well, speaking of Tennessee, the states like Tennessee,
(07:41):
north Carolina and Virginia, dothey have any say-so over how
quickly or steep premiums canrise as a regulations on that?
Speaker 3 (07:47):
Yeah, no, Insurance is one of the most heavily
regulated businesses in thecountry.
A lot of people don't realizethat when they yell at me about
their insurance premiums.
a lot of times the state, andagain this varies by state to
state.
Insurance is primarilyregulated at the state level.
The feds don't have a whole lotto do with it right now anyway.
(08:07):
So yeah, state regulations canabsolutely have a major effect
on rates, some states likeCalifornia, for instance.
So let's use them as an example.
The government likes to winbrownie points with the voters
by saying by saying we're goingto put these greedy insurance
companies in their place andwe're not going to let them
raise their prices Again, pricesin a free market.
(08:31):
They kind of hit supply anddemand thing where the company
that's doing the business has tomake enough money to stay in
business, at least break even ifnot make a profit.
Has to make enough money tostay in business, at least, you
know, break even if not make aprofit.
Otherwise why are you doing it?
And some states basically forcethe insurance companies to one
(08:53):
accept risks that they wouldn'taccept otherwise.
You know, maybe they say youhave to accept this home that's
falling apart, you know, intoyour insurance program, or this
home that's in a high risk areathat is clearly going to burn
down the next time there's afire X, y and Z, you have to
take those risks and then, oh,also, we're not going to allow
you to raise your rates, for Ithink in California's case they
went like five years withoutallowing the insurance companies
(09:15):
to effectively increase theirrates across the board, like
they were needing to.
So that causes insurancecarriers to begin exiting
markets because, if they'regoing to be, they know
something's going to happen andthat they are not making enough
money to have a reserve of cashto effectively absorb that kind
of loss.
So they started exiting themarket.
(09:37):
Famously, state Farm leftCalifornia.
Basically right before that bigfire last year.
Everybody was mad.
But State Farm, they realizedlike, look, they knew all the
factors, the fact that they wereallowing these homes to be
built in areas that were in thedesert.
They were not clearing out thebrush, they had demolished the
(09:58):
dams that had previously hadreservoirs for the water.
They weren't keeping reservoirsof water in the city.
Listen, the insurance companies.
These are multi-billion dollarcompanies.
They understand, they track allof that.
They have connections togovernment, they know what's
going on and since Californiaput them in a position where for
(10:18):
years they hadn't been able toincrease their rates or manage
their risk portfolio effectively, they're like you know what
peace out, we're going to haveto exit stage right, and they
did.
And then California came outafter the fire and tried to
retroactively make them pay forall those losses.
I think that's still in court,if I'm not mistaken.
(10:39):
So that's just one example,there's other states, like
Tennessee is actually not a badstate as far as insurance
regulation.
I think they kind of have apretty good balance of
protecting the individualconsumers and also looking after
the business interests, youknow, making sure that companies
can operate effectively.
I think Tennessee is actuallyone of the better states as far
as regulation is concerned, butwe're still tightly regulated.
(11:00):
I mean it's a thing that wehave to deal with.
Speaker 2 (11:02):
What about North Carolina?
Speaker 3 (11:05):
I don't really know that much about North Carolina.
I'm not licensed in NorthCarolina.
I could probably I know a lotof North Carolina agents, so if
we ever do one of your podcastswhere they talk about North
Carolina, I'd be happy to bringsomebody on, but I really
wouldn't be able to effectivelyspeak about North Carolina
specifically.
Like I said, it's very much astate-specific subject.
(11:25):
All the different states havedifferent regulations and laws
governing different insuranceproducts.
Speaker 2 (11:30):
Well, if I had to guess, I would say North
Carolina is more heavilyregulated than Tennessee because
Tennessee generally with incometax and is less regulatory.
I would think.
Speaker 3 (11:42):
Yeah, I mean it may be like I said.
I know North Carolina isprobably a little bit more of a
regulatory state than Tennessee,but you never know.
Sometimes you get surprised byhow states govern things.
Speaker 2 (11:55):
True, I know our sales tax is higher, but I'm
originally from North Carolinaand love the no income tax and
when you buy a car there youmight want to step across the
line.
Speaker 3 (12:08):
Oh yeah, yeah, no.
Yeah, I've never actuallybought a vehicle outside the
state of Tennessee, but I'veheard that some of the taxes for
transfers and title and thatkind of thing can be pretty
crazy.
Oh yeah.
Speaker 2 (12:24):
Love the gas price, though.
I just traveled throughVirginia and I was like man, I
can't wait to get back toTennessee where I can spend 40
cents to 50 cents less thanGallup Virginia's a beautiful
state.
Speaker 3 (12:35):
It's a little weird though, like I said, I really
hate the fact that it is soweird because it is one of the
most beautiful states I've everbeen to.
But they're definitely a littlekooky on some things in my
opinion.
But, like I said, I guessthat's why I'm a native
Tennessean.
I don't have plans to liveanywhere else unless Knoxville
(12:55):
comes out and eats us.
Then I might have to move toKentucky.
Who knows what the future isgoing to bring.
Speaker 2 (13:03):
That's right.
Thankful to be in Tennessee andthankful that we're regulated
less, especially on theinsurance front, but on a lot of
different fronts.
Timothy, appreciate yourclarity on premiums and why
they're going up A lot to thinkabout.
That isn't necessarily justyour evil insurance agent's
fault.
It's the matter of what's goingon in the world.
Speaker 3 (13:22):
I mean behind my eyebrows and my mustache.
Speaker 2 (13:25):
Appreciate you helping us to feel a little less
overwhelmed by why the costsare rising.
Speaker 3 (13:34):
Like I said, anybody who's watching this.
Like I said, I understand thefrustration.
You know my best advice to youwhen you talk to your agent,
just understand that your agenthas no controllable rates.
Those are set by the individualinsurance companies and the
state that regulates the product.
Our job as agents is to try tohelp our clients in the best way
we can.
If you talk to your agent andbe like hey, listen, you know my
(13:55):
insurance rates have gone uptwice in the last two renewals.
Can you shop it for me?
A hundred percent, I'm sure,like they'll be happy to do that
for you.
Sometimes they can find a lessexpensive rate with same or
better coverage.
Sometimes they can't.
Sometimes they might with sameor better coverage, sometimes
they can't.
Sometimes they might come backand tell you say, listen, as far
as our markets are concerned,this is the best place for you.
(14:17):
And what I tell people, I sayif it really is more than you
can handle right now, we don'thave all the markets.
There are other agents outthere who might have different
markets.
Or there are captive insuranceagents out there.
You know, like the big namesfarm bureaus, state farms, what
have you?
You can always check with them.
I want people to do what's bestfor them.
Not saying I want people toleave because this is how I make
(14:39):
my living, but most good agentsthat I know really do try to do
the best for their clients.
But if you come at somebody andjust like dump on them, it's
like you know, treat them likeit's their fault, like it's they
did this to you specifically onpurpose.
That's not true.
And again the old adage youtend to win more friends with
sugar than spice, right?
(15:01):
So people will tend to workharder for you if you approach
them in a reasonable manner.
That is, not just screaming atthem, cussing them out and I've
had people do this to me, likeright out the door, where they
even tell me who is calling.
You know, f-bomb this, you this.
And then I find out thatsomebody called me because their
insurance went up.
You know $15 a month.
(15:21):
And I'm like, okay.
I'll shop you, but you might goto the back of the line.
And again, as I said, I try tobe straight up.
That's the line.
And again, as I said, I try tobe straight up.
That's the truth, that's humannature.
So just put that out there foranybody who's watching this,
who's about to blow theirinsurance agent's ear off
because they're a random number,let's consider that before you
make that call.
Speaker 2 (15:41):
Absolutely, and if any of our listeners happen to
have an insurance agent that youtalk to, which we always give
advice Tim does to talk to youragent and you do and you don't
feel like they're working inyour best interest, call
423-417-2070, and this guy righthere will take care of you.
Speaker 3 (16:00):
Right, we'll take a swing at it.
No guarantees, but we'll try itout, there you go, straight
shooter.
Speaker 2 (16:06):
Well, tim, thanks again and we'll catch you in the
next episode.
Speaker 3 (16:11):
Thank you Skip Appreciate it.
Speaker 2 (16:12):
Yes, sir, thank you.
Have a great weekend.
Speaker 3 (16:15):
You too bud.
Speaker 1 (16:20):
That's a wrap on this episode of the Walters Agency
Podcast.
Ready to find the rightcoverage for your home, business
or family?
Call or text 423-417-2070 for afree 20-minute consultation.
Until next time, stay covered,stay protected and keep winning
(16:40):
with the Walters Agency.
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