Many people face a situation when at the time of renewal of their policy they notice an increase in insurance rates. There are many factors that can make insurance rates go up, and some of them you may discover right away, while others might not be so obvious. Before going deeper into the details, we encourage you to see if there are any changes you might know about, like moving to a different location, adding extra coverage to existing insurance, changing a vehicle or adding a driver, and so on. If you are certain everything remained the same, here are some reasons why the prices might have changed.
Firstly, there are factors out of people’s control that can make insurance rates go up. These factors include increasing catastrophic weather occurrences (which means that total claims paid out for damages go up), along with increases of costs for medical, home, and auto claims, and changes in governmental regulations on insurance.
Secondly, the insurance rates go up when your insurance carrier increases their rates. The rates adjustments in most cases have to be approved by the state, but while the company is waiting for approval, it can use the new rates instead of the old ones and just refund the difference to the customers in the event the rate increase is rejected. Some reasons why the insurance company may increase their rates include lower than predicted return of investment, inflation, and other occasions.
Lastly, a change in your credit history may be the reason why your rates keep rising. Many carriers use insurance scores to determine how risky or safe a person is to ensure. Even the slightest changes in your credit history may impact your insurance rates, so this is something also to keep in mind.