You follow all the rules of the road, avoid accidents to the best of your ability, but the insurance premium for your auto still went up. Wondering what gives?
No, the insurance company isn’t being mean and picking on you. There is always a valid reason for a rate increase. While it may not be something you did, it is almost always associated with an insurance risk.
Bodily Injury and Property Damage Costs Increase Yearly
It seems like every year healthcare costs increase and auto insurance companies are not immune from this. And it’s not just medical bills that get more and more expensive.
Cars these days have all kinds of fun gadgets (GPS, DVD player)and cameras, which means when they are damaged, there can be a hefty price tag to get them fixed. These costs get passed down the line.
Remember, as your cost of living increases, the cost of doing business increases for the insurance companies as well.
Claims Increase Your Premium
It’s not just your claims that affect your auto insurance rates. If you live in an accident-prone area or an area that gets a lot of hail, you could end up sharing the cost of insurance.
If you caused an auto accident and a claim is filed, your insurance rates will more than likely be increasing. Some insurance companies do offer a buffer that allows for a small payout without an increase, usually under $500.
Comprehensive claims affecting your insurance rate are still uncommon, but some insurance companies are getting stricter. Most do not charge extra, but some carriers will increase your rate if more than $1000 is paid out or if you have more than three comprehensive claims within three years.
Changes to Your Auto Policy
Making changes to your auto policy could affect your premium as well. These changes could be removing a vehicle, eliminating a multi-car discount. Maybe you purchased a new car and swapped it out on your policy. The newer vehicle may be more expensive to repair and therefore you may see an increase in your rates.
The same goes for adding new drivers to an existing policy. Especially teenagers and drivers with poor records. Here are some ways you can save on your auto insurance.
Moving to a New Home
It may surprise you that location plays a role in your insurance rate. Moving out of state or even moving a much shorter distance could potentially make your insurance go up. Insurance is often based on claims in your area, so if you live in a major metro area, you may be paying more than if you lived in the suburbs.
Distracted Driving, Cell Phones
More and more people are making the dangerous decision to text and drive, which causes 1.6 million crashes and almost 400,000 injuries per year, according to The National Safety Council—that’s one out of every four car accidents!
Because of this, car accident rates have risen over 14 percent since 2014. Not only does this make driving more dangerous for everyone, but it also contributes to increased car insurance premiums for everyone.
At Paradiso Insurance we are here to help you understand all aspects of your auto insurance. If you have questions about your coverage or your rates, don’t hesitate to give us a call today at 860-684-5270. Our auto insurance experts will be happy to help.
