There are lots of ways to increase your car insurance premiums; from filing a claim, to adding a new driver to your policy. However, there may be times when you notice that your insurance rates have gone up, and you don’t know the reason why.
In these instances, it may not be your fault that you’re paying more for your auto coverage – but this may bring you to ask yourself why car insurance rates are going up and if you can do anything to keep your costs the same.
Why car insurance rates are going up every year
Auto coverage rates tend to rise annually, even if you haven’t done anything to warrant an increase. While it seems unfair to have to pay the extra money, your insurer will often have a good reason to charge you more on your premiums. For example, if you live in an area where insurance companies had a higher loss to profit ratio than the year before, you might be given a higher rate to compensate for this loss.
Substantial claims loss is another common cause of higher rates for insured drivers. Whether you are involved in these or not, it could still cause an increase in your monthly rates.
Usually, to keep on running as they were before while dealing with these losses, your insurer will have to charge you and their other customers more. Otherwise, they may not be able to provide the same services, or they may even shut down – which could be an even bigger issue for you than having to pay higher insurance rates.
Things that can cause an increase in insurance premiums
Whether it is or isn’t out of your hands, these higher rates are often unavoidable. You might want to have at least an idea of what could have caused the increase in your premiums to see if there’s anything that you could do about it.
Generally, if you commit traffic violations, file a claim, add other drivers or vehicles to your policy, or upgrade your insurance; you can expect to be charged more. Otherwise, you might be paying more because:
· Your lender has decided that you’re more of a financial risk to insure (which could be for several reasons; from being involved in road accidents, to a higher loss to profit ratio in the location you live in)
· Hurricanes, flooding, wildfires, and natural disasters that could cause your insurer to pay out a higher amount of cash in claims
· If your insurer has suffered from widespread insurance fraud in the past year, they may charge more to account for the amount of money they lost
While unlikely, you could even experience a rate decrease if your insurance company has had a more successful year. While this isn’t as common, it could still happen if you’re lucky.