One of the most common question I get is why does my insurance continue to go up? I will try to give you some of the most common reasons why you are paying more.
Change in underwriting exposure. When you were first issued your insurance policy it was underwritten by your company, and based on your experience and lifestyle at that time your policy was issued. But then life happens, and you add onto your house, purchase new items and get a speeding ticket. All of these items are factors that can make the price of your insurance increase.
And yes, losses can play into your premium increase as well. Often you may lose discounts or suffer surcharges due to the frequency or size of your losses.
Rates. Insurance premiums are based on what your company feels is an adequate rate for them to charge in order to pay their expenses and earn profit. If your company suffers losses higher than expected you may see your rates increase. Most companies adjust rates annually and those rates may increase or decrease based on the current situation of your company.
Credit. Yes, your credit plays a very large role in the determination of your final insurance rates. Almost all insurance companies will take a look at your personal credit when determining your insurance rate and put you in a program for their company based on your credit. The better your credit, the lower your premium. If you suffer a drop in your credit you can expect your insurance costs to increase.
Can you do anything to manage your premium and keep your insurance costs down?
- Stay safe and out of trouble. Those tickets, accidents and claims will drive up your insurance premiums.
- Compare rates with other companies. Your life changes and your insurance coverage should too. Shop your coverages with an independent insurance agent that can offer you multiple companies.
- Keep your bills all current and work on improving your credit score. It will open doors to companies that offer more competitive rates.
If you still have questions, please visit our FAQ page or feel free to call us.
My name is Mark Lowry and as a 25 year veteran of the insurance industry I get calls every day from people trying to understand this very complicated product. My goal is to help you understand why things happen and what you can do to be better protected by your insurance dollars. If you have questions please reach out to me at the Stockton office. I will do my very best to answer every one.