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Why Did My Auto Rates Go Up When Nothing Else Has Changed?

Insurance rates can change from year to year based on multiple factors — learn what can cause auto rates to rise

Quick take: Why did my auto insurance
 rates go up?

● Changes in your life, driving record or auto insurance policy can impact rates, but are not the only factors.
● More vehicles are on the road and drivers are distracted behind the wheel, which leads to more accidents, more severe damages and injuries, and increased claims.
● The state in which you live could also impact your auto insurance rates
● A policy review with your insurance agent can help you understand your rates and make sure you are taking advantage of opportunities to save.

Q. My auto insurance premium is higher this year than it was last year, even though I didn’t have an accident, file a claim…I didn’t even get a parking ticket. Why did my auto premium increase?

We posed this question to Jim Sutton, Insurance Holdings® Territory Auto Product Lead. Here’s what he had to say about the factors considered at the time of renewal of your auto insurance.

A. It can be frustrating to see your rates increase. At IHL, we try to explain premium increases to customers upfront, before rate increases happen. The factors that go into auto insurance premium pricing do include things like auto accidents, traffic violations and parking tickets, all of which can have an impact on rates. But there are other things that impact rates which you may not have considered. Some may be insurance industry-wide, others may be personal to you and your policy.

Aside from your driving record, insurers also consider lifestyle factors. For example, if your child just got a driver’s license and was added to the policy, your rates might increase overall. A new driver poses greater risk, which is factored into the rate. Or you may have had a lifestyle discount that has since expired. Let’s say, for example, you got a speeding ticket a couple of years back and, in lieu of paying the full fine, you decided to take a defensive driving course, which had an added benefit of earning a discount on your insurance rate for a certain period of time. If that type of discount has since expired, it would cause your premiums to increase.

The car you drive is also considered. If the safety rating for your vehicle has gone down during the past year, the car may have become riskier than it seemed initially. This, too, could lead to a rate increase.

“I haven’t had any changes to my lifestyle or driving record in the last year. But my rates still went up. Why?”

Some rate increases can be attributed to things outside of your control as a consumer. There are larger factors that impact the auto insurance industry overall. For example, the number of drivers filing auto insurance claims has risen sharply over the past few years. There are more cars on the road than ever before, and the sheer volume of vehicles alone could lead to an increase in accidents and fatalities.

Unfortunately, there’s also been an increase in the severity of accidents and related injuries. With drivers more distracted than ever, drivers are more likely to be taken by surprise, to collide without braking, resulting in injuries that are potentially much more severe. Add to this the increasing cost of medical care and auto claims become much more expensive.

Finally, the cost to repair vehicles have increased over the last decade. Many drivers (including myself) are in cars that are smarter than ever before, with state-of-the-art technology. Today’s vehicles have computers, sensors, back-up cameras and other high-tech gadgets, which can be expensive to repair and replace.

“So does my auto premium pay for the mistakes of other drivers?”

Not exactly, but the concept of insurance is based on shared risk. When accidents and claims rise overall, all drivers tend to feel it. And we haven’t yet talked about where you live. Did you know the state you live in affects your auto rates? Each state has its own insurance regulations, and carriers typically have a state-wide view of those factors mentioned above (increased accidents, more severe injuries, etc.) and make rate recommendations based on that data. That means insurance premiums for someone living in Texas could be much higher than those for someone who lives in, say, Maine. 

It can be frustrating to realize so many factors outside your control can make your auto insurance rates increase. The good news is you can always talk to an insurance agent to help you better understand your rates and the important coverage you get for what you pay. Even better, use it as an opportunity to conduct a policy review, to determine if you have any gaps in coverage and make sure you’re taking advantage of potential discounts and savings opportunities.