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Why did my insurance premium increase?

There are many different reasons that the premiums on your home or auto insurance might increase. While there are many areas where your coverage and another person’s may seem similar, individual circumstances are more varied than you may think. Here, we’ll explain some of the most common reasons for an increase.

You submitted a claim

The most common reason for an increase in your insurance premiums is having made a claim. If you were at fault in an accident, depending on your insurer and circumstances, chances are your rates will go up. But the size of the increase can vary depending on other factors such as your driving record, claims history, length of time you’ve been with your insurer and if you have purchased optional Accident Forgiveness coverage.

What is accident forgiveness coverage?

Accident-forgiveness coverage can keep your rates from going up if you are involved your first at-fault accident. In addition, you will maintain your good driving record, as long as you stay with the same company.

Accidents happen, and that’s what insurance is there for. But you should still do everything you can to avoid claims. Drive safely and keep your home well maintained.

You were issued a ticket

If you’ve been notified of an impending rate increase prior to renewal, and have been ticketed for speeding, distracted driving or one of many other infractions, chances are the ticket is the cause. Depending on how far over the speed limit you were driving, speeding can result in a significant increase in your premium. The same goes for distracted driving. According to the Government of Canada, 23 per cent of fatal car accidents are caused by speeding while an additional 21 per cent are caused by distracted driving.  That’s nearly half of all fatal accidents by those two behaviours alone.

If you moved

While it may seem obvious that moving will have an impact on your home insurance, not everyone realizes it can impact your auto insurance as well. While moving can also decrease your premiums in some cases, it can increase it in others. Different towns, provinces and sometimes even neighbourhoods all pose different levels of risk for claims. Risk factors that can affect your premiums include:

  • Traffic patterns
  • Access to emergency services and resources, like a fire hydrant
  • Proximity to water that could cause flooding

Climate change and extreme weather

Climate change and extreme weather does have the potential to impact your insurance premiums. Increased flooding, more severe storms and wildfires (though not as common in our area) all play a part.  These types of events they cause more damage than in the past, and as the number of claims increase, insurance companies may be forced to raise premiums to ensure they can provide coverage for everyone.

Increase in repair costs

New vehicles rolling off the assembly lines these days have far more technology than ever before. While many of these conveniences make driving a more pleasant experience or even dramatically increase the level of safety, this technology can be expensive to repair or replace once damaged. Quite often parts are specialized or systems must be recalibrated with specialized equipment, which means only certain mechanics can repair the damage. These factors all combine to mean increasing repair costs, resulting in higher premiums for everyone.

Other factors

While the examples above point to direct causes for premium increases, there are also situations beyond an insured person’s control that can impact premiums indirectly, such as inflation. Inflation is an overall rise in prices in an economy, in which the general level of prices for goods and services increases. Simply put: inflation means things get more expensive across the board, including insurance.

How to avoid an increase in insurance premiums?

  • It’s important to keep in mind that there are plenty of things you can do to avoid increases that are completely within your control:
  • Observe the speed limit and keep your eyes on the road – don’t text while you’re driving!
  • If you’re a new driver, take a driving course – most insurance companies offer discounts if you’ve graduated from an accredited course.
  • Keep your home well maintained to avoid costly repairs and damage, which could result in claims.
  • Pay your insurance bill on time. Failure to pay your insurance bill could result in the cancellation of your policy for non-payment, which could affect your insurance premiums in the future.
  • Bundle your home and auto insurance policies. This could save as much as 15 per cent off your annual premium!

Whether you’re looking for home, auto or business insurance, DPM Insurance Group can help. Our brokers and CSRs will take the time to get to know you and ensure you have the coverage that best suits your individual needs at a price you can afford. Click here to find the locations nearest you: https://dpmins.com/locations/

Source: BrokerLink

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