Why the *#%$ are my insurance premiums going up??Mar 21, 2019
There is nothing more frustrating than getting your insurance renewal notice and seeing the price go up, regardless if you made a claim or not. Some factors are in your control and, unfortunately, some are not. Economical has release this great summary:
But are there other factors?
Things in your control:Accident Claims, Tickets and Other Citations
These are obvious causes for your rates going up and this hasn’t changed. The insurance company assess your “risk” and speeding tickets, accidents, etc. illustrate that you may be more likely to make a claim.Your Personal Credit Rating
Did your credit score go down over the last year? Were you late on any of your car or home insurance payments? That can lead to higher car insurance rates or your insurance carrier to no longer offer you monthly payments.
Insurance companies, with your consent, do a soft credit check when you apply for coverage. It is a non-intrusive way for a company to see if you qualify for additional savings due to your history of paying what you owe. Every insurance company may offer different discounts, but it can provide you with 20-40% in savings for having a good credit rating. Note: soft hits do not affect your credit score.
Things out of your control:The area you live in.
Stolen cars and property crimes create payouts by insurance companies. Areas with a high rate of crime are viewed by insurance companies as high-risk areas thus people living there can experience rates increases due to an increase in criminal activity.
For example: When neighborhoods grow, it alters demographics and risks. Maybe a new bar has increased the potential for crime or a new subdivision has altered city infrastructure which are some factors insurers look at when assessing risk.Fraudulent claims
Fraudsters who stage accidents to make money are affecting the entire industry. The “insurance industry estimates suggest between 5 and 15% of premiums drivers pay for car insurance goes toward covering undetected fraudulent claims. Auto insurance fraud is estimated to cost taxpayers $1.6 billion annually, though insurers like Aviva Canada peg the figure higher, at over $2 billion.”* Rates increase to cover these costs.
When looking for new insurance or are up for renewal, here are our tips:
Financial Strategist at Savanti Wealth
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