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My insurance rate went up but I did not file a claim!

I am going to keep this as easy to understand as possible but there are so many factors that control auto insurance rates. The bottom line is, I HATE it too when my client's rates go up. I know some people think I am probably happy, but I am not. because I do not look at my customers as a paycheck. I look at them for what they are...families, with budgets. I understand how this current inflation is affecting everyone.

Auto insurance companies price their policies based on a lot of factors. Sometimes these cost factors go up, and sometimes they go down. In most states, costs are currently rising. Your actions, as a policyholder, can affect what you pay, too. For instance, if you add another car, or a teenage driver to your policy, your costs will increase. Alternatively, your costs could decrease if you drop a car. Your credit also has a large impact on your rate. (Some people agree with this and some do not but until the law changes that is how it is).

In no case is it personal. It is all based off data. For ease of explanation, insurance is money put into a "Pot" by many policyholders as a "just in case" fund. Sometimes you need it and sometimes you do not. The ratio of money into the pot versus money leaving the pot has mandates that have to be followed to keep enough money into the pot in case of a catastrophic event that would result in a massive number of claims at once.

There are also other factors outside of your control that could cause rates to increase, such as the crashes other people are involved in. The number of crashes, and the cost of these crashes, range in every state. For example, drivers living in large metropolitan areas are likely to pay more. This is simply because more cars, therefore more crowded roadways, increase the number of car crashes in those cities. On top of all that, speed limits are also being raised. Speed is the single-biggest contributor to crashes in which driver error is cited as the cause. Distracted driving is an issue everywhere. In big cities and small, people texting, talking, or otherwise occupied with another activity while driving is being blamed in part for more crashes.

Auto insurance covers more than vehicle repair. It also covers the cost of injured crash victims’ medical care and lost wages as well as the repairs and/or replacement of vehicles and any property damaged in a crash. In recent years, medical and auto body repair costs have increased at a rate much faster than inflation. Legal costs have gone up, too.

Rental costs have been higher than normal due to the supply issue with parts taking longer and labor taking longer to fix the cars due to the labor shortage. Not to mention the chip issue causing a low stock of rental cars.

So, in other words, we know it is not ideal to have your rates rise. As a independent insurance agency we are committed to checking over your policies to make sure you have the best coverage at the best price to see what we can do to help you navigate this crazy market. As always, we will continue to not charge a brokerage fee on our end to save you that cost.

Melissa Probst

Agency Owner


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