No matter the type of , , or business protection – you’ve likely received a renewal bill and asked, – “Why did my go up?”
While some increases can be attributed to hikes, others have more to do with your specific circumstances and the way your calculates risk.
In this article, we will answer the question “?”.
We’ll look over some of the main reasons why lower.premiums increase, how your measure risk, and what you can do to keep your
Why Do Premiums Increase?
As personal and commercial agents, this is an extremely common question that we get from many of our clients. And it’s completely understandable. Many of our clients are confused or annoyed that their costs have gone up, and don’t know why.Unfortunately, the answer is not always simple or straightforward. There are many reasons your premiums can increase, some of them are specific to you, and some are not.
A or is often calculated based on a set of factors unique to each .
A lot of and premium changes comes down to something called ‘claims probability’.
What Is Claims Probability?
In the , this is one of the reasons higher premiums appear every year. For , , or a , the same thing can happen. industry, many factors are used to calculate the probability of someone having to file a claim. The higher the probability of an , the higher your premium costs can be. When it comes to
Here are the key factors that can cause a higher likelihood of a claim and premium changes.
1) Past Claims History
As far as companies are concerned, a history of past claims increases the odds that you’ll make another one. While this may or may not be fair, it is one of the ways they measure probability.For example, home insurers will share information about claims from the last seven years through the Comprehensive Loss Underwriting Exchange (CLUE).
Past claims could boost your premiums even if you weren’t the claims are also registered by CLUE, and your premium rates may increase if you’ve made a lot of claims, even if you weren’t at fault. This is because, statistically, you pose a higher risk.Remember that when it comes to your ‘s history, having more of them on your records generally means you are a higher risk of future claims.who made the claims.
Financial Lenders will evaluate your companies also look at your , but for a different reason. companies figure that people with low credit scores are more likely to get into accidents than people with high ones., among other things, to estimate your credit risk and ability to repay a loan. What you may not know is that
Whether this logic is fair or reasonable, it is the way that they have deemed the risk probability works. It can be a direct cause of an .As a result, they might charge more if you have a lower . Keep in mind that some states, including California, actually prohibit insurers from using credit scores when setting rates.
3) Driving Record
It makes sense that your driving record would affect your premiums. You is tied to driving record, and the likelihood of future claims is based on an ‘ record.Suppose you’ve had more than two violations in the past three years (i.e., , reckless driving, driving under the influence, at fault ).
In that case, your might consider you a higher risk for auto accidents and claims. This will cause an increase in your .If you’ve had a DUI in the past, you’ll likely pay higher premiums (and higher deductibles) for your . In some cases, you may even be denied if you’re labeled as a “high risk” case.
This is why a good driving record is wise not just for your own safety, but also for a more affordable .
4) Zip Code
When moving house, you can sometimes see an increase in premiums. This is because premiums and claims probability are also tied to your address. Depending on your current or new location, premiums can become higher or lower. Specific zip codes are more populated than others, which increases the risks of an auto , , or creates a higher cost of health care. This means when you move, you could see a price increase on your premiums.
5) Changes in Vehicles
When you add or replace a vehicle on your policy, you might see a jump in premium. This is because certain vehicles cost more to insure than others. In the event of a claim, that vehicle would cost more to repair or replace, and these costs are calculated into the . This change can affect your depending on the value of the vehicle.
Will Rates Increase if I Make a Claim?
Another big concern for many people is, “Will my rates automatically increase if I make a claim?” The short answer is that it depends on who or what is at fault. A single will not usually trigger higher rates for policies, but two or more probably will, depending on the .
Keep in mind that most companies won’t raise rates if the claim results from severe weather or some other catastrophe. When it comes to , some companies also offer to reduce the chance of a after an .
Can You Help Lessen Costs?
As a rule, , , premiums, and . premiums tend to go up rather than go down. This is just a reality of life, and it applies to your
An increase in premiums can be difficult to manage, especially if you were not expecting it. However, there are some things you can do to help control the costs of . The first of these is to drive safely, as your driving record impacts your . The next step you can take it to improve your . Improving your could improve the cost you pay for . Finally, you can check for discounts from your . Many carriers will give discounts if you are a student, in the military, or if you have multiple policies through them. Check with your for any available discounts and how you might qualify.
Most importantly, talk with your independent , as they have access to multiple carriers on the individual market. If you are not happy with your current , or facing a , or want to remarket your , we can help you find the best price for your needs and budget.
Jackson & Jackson Agents and Brokers offer a full-service center with over 80 years of experience serving the local San Dimas, Glendora, and LaVerne business communities. We offer all lines of to meet your home and and commercial business needs. If you have questions about policies or need to look at extra , we are here to help.