Understanding Why Insurance Rates Increase And What To Do About It
If you haven’t filed any claims with your insurance company, you may be wondering why your insurance rates are increasing, even if it’s only slightly. You’re not the only one experiencing this frustration. There are many factors that go into insurance rates, no matter how many traffic violations you do or don’t have. Here are a few examples of why your rates may be increasing, and what you can do to save money when they do.
Why Insurance Rates Increase
Amount of Cars on the Road
Even if you haven’t been in an accident, you could still experience an insurance rate increase. That’s because when there are more cars on the roads, the chances of drivers getting into an accident increases. This is typically why rates for driver’s who live in highly populated areas, such as cities, can have slightly higher rates. When there are more accidents, there are more claims, and everyone’s rates increase.
An Increase in Repair Costs
When you get into an accident, you will need to get your car repaired. Like with anything else, these costs can increase over time. For example, many of the newer cars offer sophisticated technology and features that are costly to fix when they need repairs. Things like this cause insurance carriers to increase their rates, regardless of whether or not you personally experienced the repairs.
Extreme Weather Events
When there are severe weather events, such as hurricanes, floods, and earthquakes, insurance companies experience a significant amount of claims. If this happens to be in your area, you can expect a rate increase even if you didn’t file a claim. Insurance companies need to raise their rates to make up for the influx of claims.
What You Can Do
Although there are some factors contributing to your insurance rate increase that are seemingly out of your hands, there are some things you can do to try and control your rates to keep them more manageable:
Complete an annual review of your policy to ensure you’re taking advantage of all the possible discounts available to you. Many insurance companies offer discounts to students, good drivers, federal employees, having more than one vehicle on your policy, and even for certain car safety features. Life is always changing, so it’s important to review your policy each year to make sure you’re taking advantage of these discounts.
Use telematics to maximize discounts. Telematics are systems designed to track and monitor your car, and are becoming an increasingly popular way for drivers to maximize discounts through their insurance carriers. This data can be collected from your car by a built-in device in your vehicle (if your car is less than 10 years old), a plug-in device, or a mobile app. Collected data includes your driving habits, such as hard breaking and fast accelerations, as well as speed and the time of day that you are often on the road, among others.
If you’re experiencing an increase in your insurance rates, you’re not alone. Even though there are many factors that are out of your control, a few simple steps can be taken each year to ensure you’re maximizing the discounts that are available to you.