Working as liaisons between the insurance companies and our clients, we often receive similar questions. One of those frequent questions is "Why did my insurance go up?" While this seems like a fairly easy response, it is often one that deserves some time and research by our agency representatives.
Here are the top five reasons auto insurance policies increase.
I Do
Marriage -- there's nothing like it. This can be true, especially when joining auto insurance policies and deciding whose home to live in. With auto insurance, it is beneficial usually to get one auto insurance policy versus having two separate ones, as there can be a discount for having more than one car or truck resulting in better pricing. However, when you or your significant other does not have the perfect or near perfect driving record, this can cause you to pay higher than normal rates until the incidents, accidents, or violations have run their course (usually 3 years) and fallen off the driving records.
Location, Location, Location.
Believe it or not, where you live and park your car or truck matters on your auto insurance policy. On your auto insurance policy, this is found under the garaging address, particularly if your mailing address is a PO Box, or if your car is parked at a college dormitory and your parent's own the auto insurance policy. There can be a significant difference in auto insurance rates if you live in a city versus in the country. In a city there are usually more cars and trucks moving around and the potential for a collision accident is greater. In a city, you may pay higher collision car insurance rates. While in the country, there may be less cars or trucks traveling, and you may have more potential for an impact with an animal (comprehensive). In the country, you may pay higher comprehensive car insurance rates. In addition to city or country, other features which can cause insurance rates to be higher are: higher theft or vandalism potential, the distance to travel to work and the experience of the driver.
State Regulatory Rates
All states have a regulatory department which monitors insurance matters. This department is called the Department of Insurance. There is a commissioner which heads up this department. Their job consists of regulating the insurance rates the insurance companies charge the consumer. Without this department, the insurance companies rates could become too high or too low. With too low of rates, the insurance company could be setting itself up for failure, and not have enough funds to pay claims. The overall ideal is for the insurance companies to charge an adequate rate, so that if there are claims, the insurance company would be solvent and have the funds to pay out claims. This department also helps prevent unfair charges. For example: An insurance company cannot require a policyholder who has no speeding violations, to pay the same rate as a policyholder is being charged for 3 speeding violations.
Life Changes
Life Changes The initial insurance contract you selected may not be the right insurance protection as you continue on your life journey. As your life needs change, so must your auto insurance plan. Your first policy coverage decisions may have been related to affordability -- like having only the state minimum liability limits to get your car or truck on the road. As you mature, so must your auto insurance plan. With life changes - getting a second+ car or truck, marriage/lifetime partner/significant other, having a child(ren), adding a youthful driver, it is important to consider maturing your auto insurance policy. With each of the life changes mentioned above, our driving needs become greater and there is protection available to meet these needs. Talk with one of our licensed representatives today to find out which plan best suits your needs!
- Adding a car or truck. (Age, type, weight and potential collision impact damage)
- Adding an inexperienced driver (Your teen will not have the experience or reaction time as an experienced driver.)
- Buying a house (Auto and Home bundle discount)
- Driver's Education and Good Student Discounts (Can aid in the offset increase for a new teen driver.)
- Marriage (Driving records for all drivers in the household.)
- Divorce (Driving records for all drivers in the household.)
Claims
No one living today is a perfect driver. If you have been fortunate enough to not experience an automobile accident yet, you are fortunate. But that is why you carry auto insurance protection! Having a claim may impact your auto insurance premium for a limited amount of time, usually 3 years from the date of the incident/accident. However, not all claims negatively impact your premium.
Claims adjusters work on your behalf to determine fault through their detailed investigation. The claims adjuster utilizes the following tools to help determine who is liable/responsible for the accident:
- talking with both drivers,
- talking with any independent witnesses (neither driver knows),
- reviewing the police report,
- reviewing the scene of the accident
- and where the impact/damage occurred on the vehicles.
Not at fault -- If you were found not at-fault in the accident, you do not have to file a claim on your auto insurance policy. This type of claim should not cause your auto insurance premiums to increase.
At Fault - You have been found partially or completely at fault in an accident. Using your collision and comprehensive to repair your vehicle + your liability limits will go to the person(s) you collided with -- for their injuries and damage to their vehicle. This type of accident will more than likely cause your policy premium to increase.
Let Us Shop The Best Rates For You
As you can see, there can be many factors why your auto insurance premiums can increase -- some may be within your control, others may not be. Having an independent insurance agency, like Consultative Insurance Group, is beneficial to you. We can shop multiple insurance companies to help you get the maximum insurance protection for your insurance dollar! To learn more, reach out to us today or visit our auto insurance page and shop for yourself! No matter your preference, we look forward to having you join the Consultative Insurance Group family!