Why did my auto insurance premium go up?
Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.
It’s important to know that there are other factors that may also affect the price you pay.
Factors that affect your rates:
Your car-Some vehicles cost more to insure. Cars with some of the newer safety features and anti theft features can sometimes rate lower than cars that do not. The original cost of the car goes into that as well as the cost for replacement parts. A more expensive car would be a larger claim for the insurance company should it be totaled so a more expensive car costs more to insure. A HUGE myth is red cars cost more to insure. We actually have no information on the color of the car!
Your credit score-Not everyone believes that credit score should affect insurance rates. No matter your beliefs, your credit does affect the rates. The thought process is that the higher the credit score, the more responsible you are.
Your driving record-If you've been in multiple accidents, your cost for car insurance is likely to be higher than someone with a clean driving record. If you're a new driver and have not had insurance before, chances are you'll pay more for car insurance.
Lapses in insurance-Paying your premium on time is very important as lapses in insurance causes you to have higher rates. There are reports that get run and your lapse in insurance does show to the carriers and is accounted for. If you think you will be late call the carrier or your agent and see what can be done. Do not let the policy lapse as you will be without coverage and pay higher rates when you start the policy again or get a new one.
How much you drive-I think this explains itself. You drive more, there is a higher chance of an accident.
Where you live and park- Where you live and where you park your car overnight may affect your car insurance premium. Urban neighborhoods usually have higher rates of accidents, theft and vandalism than more rural areas, which means premiums may be higher.
Your coverage-The coverages you choose may affect the cost of your car insurance premium. Most states have some coverage requirements usually involving your liability coverage limits. Coverages that are also typically included in a car insurance policy are comprehensive coverage, collision coverage, uninsured/underinsured coverage, and medical payments or personal injury protection, depending on the state. There are also optional protections you may want to consider such as towing and labor costs, and rental reimbursement.
Your limits and deductibles-Your limits and deductibles affect your rate. The higher the coverage, the more risk the insurance company is taking on and to help lower that risk you can take a higher deductible which results in a lower rate.
Actuaries set the insurance rate based on specific variables, while underwriters decide which variables apply to a specific insurance applicant. Since an insurance company is a business, it is obvious that the rate charged must cover losses and expenses, and earn some profit. To be competitive, insurance companies must also offer the lowest premium for a given coverage. All states have laws of what insurance companies can charge, and both business and regulatory objectives must be met. A lot of times people think agents or companies can just change their rate. That is not true. We can add or remove discounts that apply or no loner apply. We can adjust the premium is any of the factors above change but we cannot just change it. Auto insurance (As with all insurance) is highly regulated.
So what should you do if your insurance rate increases? That is why Sincerity Insurance Solutions is a independent insurance agency. We go look through all of our insurance carriers to see which company is best for YOU. It might be time to make a change. Rate increases are not personal. It is all based on data and the regulated rates set by the actuaries.