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Why did my insurance premium increase?

Why did my insurance premium increase?

Obviously, no one is happy when they receive notice of an increase in their insurance premium at renewal time. There are a lot of different reasons that can happen. Here a few of the reasons why your auto or home insurance rate may have increased and tips on what you can do to manage your insurance premium increases at renewal time.

Why do home or auto insurance premiums increase?

Insurance policies differ from client to client. Regardless of what you’re insuring – a car, a home, a business – insurance companies weigh a variety of specific risk factors to determine your rate. So, if you’ve received notice that your premium will increase at renewal, here are some of the most common reasons why:

You submitted a claim

Claims in the previous year are one of the most common reasons your insurance premium may have increased. Let’s say your car insurance premium increased – if you made a claim after a collision and it was ruled the accident was your fault – that would be the cause. However, the increase can vary depending on other factors including your driving record, loyalty, and whether you have purchased optional Accident Forgiveness coverage.

What is accident forgiveness coverage?

If you are involved in your first at-fault accident, accident-forgiveness coverage can keep your rates from going up, and you will maintain your good driving record, as long as you stay with the same company. The fact that accidents happen is what insurance is there for. But you should still do everything you can to avoid claims.

You got a ticket

Caught off guard by an increase in your car insurance premium? Did you get a speeding ticket? Speeding tickets can cause significant increases in your car insurance premium. You could also see an increase if you received a ticket for distracted driving, among other Highway Traffic Act violations.

You moved

Moving can impact your home and car insurance premium. Different provinces, cities and locations have different risk levels that can impact on your premium. Every area has its own risk factors, such as:

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

When insurance companies receive more claims, they must raise premiums to ensure they can provide coverage for everyone.

More expensive parts

Newer cars are loaded with lots of technological advances, and they can make our lives easier and our roads safer, the parts and systems are often expensive if the need to be repaired or replaced. Sometimes the parts are specialized and the systems must be recalibrated with specific equipment, which means only specially trained mechanics can repair the damage. All this means car repair costs are increasing, which can lead to higher premiums across the board.

Other factors that can increase your insurance premium

While these are some of the most common direct causes that could increase your insurance premium, there are factors outside of our control that may influence insurance premium costs 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.

Is it possible to prevent an increase in insurance premiums?

There are a few things you can do to help manage increases to your insurance premiums.

  • Avoid car insurance claims by driving safely. Observe the speed limit and keep your eyes on the road – and don’t text while you’re driving!
  • New drivers should consider taking a driving course – some 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.
  • Always 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!

Regardless of the type of insurance policy you seek, the brokers and CSRS at DPM Insurance Group are here to help ensure you get the best coverage and the best rate. Our staff will take the time to get to know you and create a customized plan just for you.


Source: Brokerlink


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