RATE CHANGES FAQS

The nature of insurance is that we pool our risk. Put simply, this means your premiums are impacted by what’s happening across your community, the country, and even the globe—not just by what you do as an individual. 

Even if you’re a safe driver with minimal claim history, you might still see a rate increase on your Auto policy this year, if you haven’t seen one already. Why? Because on a larger scale, claims severity and frequency have increased significantly since the pandemic. Collectively, the financial risk is higher not just for us, but across the industry. 

Why is it costing more money to repair damages and replace losses? Labor shortages, supply chain disruptions, the cost of new technologies, increasing medical costs, and the impact of climate change are all factors. 

Review coverages: If it’s been a while since you reviewed your policy coverages, you may be paying for things you no longer need. Ask our licensed insurance agents to review your current coverage to ensure you’re getting the customized protection you need. 

Increase deductibles: Choosing a higher deducible can have a significant impact on lowering your premiums; just be sure to select a limit you are comfortable paying if there is a loss. (If you have a loan or lease on your vehicle, there may be a maximum limit for your deductible). 

Review discounts: Be sure to go through our "discount checklist" located on the cover letter in your renewal to confirm you are receiving all the discounts you qualify for, or visit our discounts page.

We wish there was an easy fix. We will only raise rates until they align with the cost of paying claims. In other words, we need to adjust our prices to align with the external market factors mentioned above (increased cost of goods and technology, increased labor costs, supply chain disruptions, inflation, climate change impacts, etc.). If we don’t, then we’ll continue to pay out more money than we’re taking in, which is not sustainable.  

We appreciate your loyalty, and we’d like to continue to help you protect what matters most for years to come. We value the fact the majority of our members have been with us for decades!  Due to the current market conditions, rate adjustments are unavoidable.  

These conversations are tough; our aim is to be as transparent as possible as we talk about what’s happening with your insurance and the industry as a whole. Our licensed agents are here to guide you through your insurance journey and answer any questions you may have. 

We understand price is a large consideration with your insurance and respect that everyone has a budget to consider. More than anything, we want you to make the choice that’s best for you.  

Additionally, we urge you to consider the long haul. What will your experience with another carrier be when you are in a time of need? Make sure they can meet your needs beyond just pricing considerations, because prices change. 

Our goal is to provide you with member-first service you can count on and be there for you when you need us most. We appreciate your trust in PEMCO and hope to continue that relationship with you 

The insurance industry is experiencing a spike in claims costs caused by global supply chain issues. The emergence of high inflation for auto claim costs was unforeseen. As a result, the industry, including PEMCO, is taking action to create more flexible products that can more quickly address issues in the marketplace. Introducing a 6-month auto policy and transitioning our existing policies to a shorter term will help to realize rate changes faster, increase the opportunities to underwrite policies, and add flexibility to update contract language.

PEMCO plans to have 6-month auto-policy terms for the foreseeable future. 

We know that having your property coverage non-renewed is unexpected, especially for those who’ve chosen to do business with us for many years.  
 
Being a mutual means we look out for each other and help homeowners get insurance coverage, even if it isn’t with PEMCO. We can connect you with our affiliate, PEMCO Insurance Agency, or a community agent near you to help explore alternative options.

PEMCO uses many different factors when determining your premium. One of those factors is your insurance score, determined using information provided by Equifax. It is important to note that we do not use this information to evaluate your creditworthiness. While your credit score measures creditworthiness, the insurance score measures the likelihood of insurance risk. We combine your insurance score with other factors such as your driving record and claims history to evaluate your overall insurance risk. Our goal is to provide you with a fair and accurate premium based on a comprehensive assessment of multiple factors. 

If you would like more information on insurance scores, please visit insurancescores.fico.com. 

A "mutual” operating model means that PEMCO is owned by its policyholders rather than by external shareholders or investors. It functions much like a credit union or co-op. As a mutual, we prioritize relationships and put people first. It’s the way we’ve operated for nearly 75 years. Our primary focus is on serving the best interests of our members (you), rather than maximizing profits. In other words: we prioritize effectiveness, not just efficiency.   
 
All money earned goes back into making your policies as affordable and comprehensive as possible while delivering the unparalleled service you expect and deserve.

A mutual insurance company is owned by its policyholders, and this unique structure offers several benefits to members including:

• Focus: Mutual insurers typically strive to prioritize policyholders’ interests and focus on quality. Without the pressure to please external shareholders, mutual companies can prioritize the needs and concerns of policyholders. This translates to better customer service and tailored coverage options.
• Profit distribution: In a mutual, profits can be distributed to members through dividends or premium reductions. A standard carrier will distribute profits to external shareholders. 
• Ownership: In a mutual, policyholders are considered part-owners of the company. This means they have a direct stake in its success. As owners, policyholders have the right to attend PEMCO’s annual meeting of members, review financial results for the prior year, and participate in elections for our board of directors. 
   
  In a standard operating model, external shareholders or investors own the company.