What Causes Auto Insurance Rates to Go Up?
Every vehicle driver living here in the Greensboro area is required by North Carolina State law to be insured to drive, so it just makes sense to get the best insurance you can find at the best price available. That being said, even once you have a quality auto insurance policy in place you may find, over time, your auto insurance rates rising.
There are numerous reasons why your auto insurance rates may increase, and knowing what these are may help you head off future increases before they occur.
Risk is the Name of the Game
Auto insurance companies are in the business of risk sharing. As a policyholder, you represent a certain level of risk to them that they’re willing to assume in exchange for your premium dollars. They go to significant time and trouble to figure out how much they need to charge you, according to your risk level, in order to profit from your financial arrangement. Their goal is to take in more money by way of premium dollars than they pay out in claims dollars. They must also have enough left over to cover the costs of running the business.
When your auto insurance policy is issued, the rate is set by the perceived amount of risk you represent to the company’s bottom line. If their risk assessment changes while you’re covered by their policy, it’s within their rights (and makes good business sense) to also change the amount they charge you for their protection.
At the top of the list for events that your insurer will translate as increasing your risk to them are moving violations, such as speeding tickets, and accidents. Multiple moving violations or accidents will not only increase you policy premium rates but may even cause termination of your coverage.
Many life changes can also cause your insurer to perceive you as being a higher risk, which will cause them to increase your rates proportionally. If you move, changing zip codes, you may be moving into an area where statistically greater numbers of accidents occur. Your rate may increase.
Change jobs that causes a significantly longer driving commute and this could raise your rates. Add a teen driver to your coverage and you’ll see much higher rates. Declare bankruptcy – look forward to higher insurance rates.
Consult your agent for more reasons, as well as ways to obtain rate discounts.