5 Top Reasons why your Auto Insurance Premiums Increased

Insurance rates are constantly changing and although you want to be on the decrease side of the change, most people like you, find themselves on the increase side and that's no picnic. Don't know about you, but I can think of a million ways to spend my money besides making the insurance companies even MORE rich. But since most states require auto insurance there isn't much of choice. The logic is the insurance industry needs to make sure they are generating enough premiums to afford to stay in business and they do this by maintaining a certain balance. The balance is to assure they are taking-in more than they are shelling out and to stay in business, insurance companies need to stay well in the black! Insurance companies do this a few different ways.

1. Moving Violations. GOT TICKETS?

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Most of us do and these companies know it. Insurance companies will periodically run your Department of Motor Vehicle report to verify if you received any recent moving violations. Moving violations or traffic tickets are one way the insurance companies maintain that balance. Moving violations are classified by 2 categories, Minor and Major moving violations. Minor moving violations tend to consist of seat belt tickets, speeding tickets (29 mph or less over the speed limit), red-light tickets, etc. Major moving violations consist of DWI, DUI, Eluding Police, Drag Racing, hit & run violations, speeding tickets (30 mph or more over the speed limit) etc. Ultimately, moving violations do not cost the insurance companies a penny but you, the policyholder will be paying double!! You pay for the moving violation itself and you pay for the insurance company’s penalty for receiving that ticket. The insurance carriers feel that if a driver receives a moving violation that increases the chances of a driver causing an accident.

2. At-Fault Losses. Insurance companies will also periodically run your KLUE report electronically, which is used to verify if you have any unreported losses. During this periodic review, your insurance carrier will also review any accidents that occurred in the past 3 - 5 years and make sure they are charging you for any surchargeable losses. The amount of the surcharge or increased premium varies and can be quite expensive. What?? Like you weren't going to have to pay that back!

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3. Tier Changes. Tiers generally refer to the risk group you you were placed in at the inception of your policy. Insurance Companies will review your policy usually on your anniversary renewal to verify if you are in the correct tier, depending on your insurance company’s underwriting guidelines. If your insurance company reviews your policy and they find a certain amount of moving violations, at-fault losses, and yes, even non at-fault losses, they can place you in a higher-rating/paying tier. This just means that your driving history has become too risky to keep you in the current lower-rating/paying tier. This is the insurance company’s way of telling you your driving record is not acceptable for your current tier and you will be forced to pay a higher premium.

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4. Usage. Have you ever called your insurance company and told them your address changed to a lower risk neighborhood and your insurance premiums still increase??! Chances are, the way you use your vehicle on a daily basis may have changed, which may have increased your premium. Using your vehicle work, school or pleasure will give you different rates. How often you use your vehicle will also affect your premiums.

5. Rate Increase. Sometimes, you won’t speak to your insurance carrier for months and you won’t have a moving violation or any type of accident and your premium still increases!! That’s because your insurance carrier might have filed for a company-wide or state-wide rate increase. This means your insurance company predicted they may not be as profitable and they file a notion with the state government to request permission to raise your rates!! The state will then review all the evidence presented and grant or deny your insurance company’s request. Some insurance companies have more influence on the state government than others, but the likelihood of the insurance company getting permission does vary.

So next time your insurance rates increase, don’t call your insurance companies with an attitude; call them with questions on how to get your insurance premiums lowered. And since this post levels the battle grounds, you will be in a better position to communicate effectively with that insurance rep and get the rate you want. If you have any problems, just hit me up-I gotchu!