Have you ever received the renewal letter from your insurance carrier and been shocked to see the new renewal premium rate? You are not alone in wondering ‘Why did my premium go up?’ Did you know that it is normal to see an average of 3%-8% increase in premium each year? A few common reasons for this increase are listed below:
Have you gotten any new traffic violation tickets?
Oftentimes, the insurance company will run your Motor Vehicle Record (MVR) and add any new violations for drivers in the household. If they find any new violations that typically will increase your premium. Along with that, some insurance companies offer discounts for no violations and that discount would then also be removed.
Have you gotten in any new accidents?
Similar to any new traffic violations, any new accidents (whether at-fault or not-at-fault) will be added to your policy for each driver in the household. When it comes to claims the at-fault accidents carry a much higher increase in premium than a not-at-fault accident. Again as mentioned with the traffic violations, if you previously qualified for a claims-free discount, this may also be removed.
Has your answers to the previous questions been “no”? The most common reason for an increase can be answered below:
Have you noticed how the cost of living goes up every year?
As cost of living goes up each year, so will the premium. Cost of supplies to build or repair homes increases. The technology in vehicles has become very advanced and cars are becoming more and more expensive to purchase or repair. All of these costs add up and the insurance company has to take into account those increase of cost.