Why Did The Price Of Car Insurance Went Up And What Drivers Can Do To Take Control

Why Did The Price Of Car Insurance Went Up
Why Did The Price Of Car Insurance Went Up

It can be frustrating for drivers who have no claims to get a car insurance renewal and see the price go up for no apparent reason. There are many factors that can make the price of car insurance increase. Some factors are related to the things that revolve entirely around the policyholders’ situation, the elements within their control. Other factors are beyond the policyholder’s control.

Some of the most common factors that can lead to an increase in insurance are the following:

  • Claims history and driving record.

  • History of convictions or driving violations.

  • Change of ZIP code.

  • New drivers added to the policy.

  • Cancelation of home policy, or other policy causing the loss of the multi-policy discount.

  • The removal of a vehicle from the policy, causing the loss of the multi-car policy discount.

  • Change of employment, causing the loss of a group or professional discount.

  • Certain medical conditions.

  • Mistakes made by insurance companies.

  • Changes to the payment plan fees or structure on the insurance plan.

Factors that raise the premiums and are beyond the driver’s control are the following:

Liability claims paid out by the insurance company. If the previous year(s) showed a steady increase in the amount the insurers have been paying on claims, then they can make some adjustments.

Collision, vandalism, or increased claims in the area. Sometimes due to changes in traffic patterns, weather patterns, or if areas become more congested over time, or a variety of other factors, an area may start to see increased claims. In these cases, the insurance providers will adjust their rates.

A rise in car theft rates in the area. Car thefts impact both new and old cars and every time the annual reports of top stolen vehicles come out; insurance companies are sure to take note. Drivers who own models of cars that are likely to be stolen should consider adding anti-theft devices or vehicle engraving and get a discount to offset the increases.

Uninsured drivers. The nationwide rate for drivers without insurance increased from 12.3 percent in 2010 to 13 percent in 2015. Insurance providers pay billions of dollars each year on the claims made on uninsured drivers. To offset these costs, insurance companies will raise the premiums to all policyholders.

Increased repair costs. Newer cars have sophisticated devices and gadgets that are expensive to repair or to replace. Also, some policyholders own older vehicles that have parts that are more difficult to be found on the market.

Credit scoring or underwriting changes. Sometimes, new factors are introduced into the calculations of insurance rates. In some cases, the files are not updated to include all the discounts and changes since the last renewal, and this can lead to a rise in premiums. One example is credit scoring. Most insurance companies use the credit score to determine insurance rates. A bad score will lead to higher insurance costs.

General underwriting rate increase. If an insurance company experiences overall losses that exceed their expectations, or if they have not reviewed their policyholders’ rates for several years, then they will increase the rates to remain profitable.

To save money on insurance, policyholders should get the help of their insurance agents or brokers. To check from where the increase is coming for, policyholders can ask their agent to quote another car in place of your own, if they think the vehicle is the reason for the increase. If the policyholders think it’s about the area where they live, their agents can simply get a quote with a changed ZIP code. Agents can also help by checking other insurance companies for better deals.

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