My Insurance Premiums went up! What gives?
Drivers who are responsible are proud of their faultless driving records. If you are the type of person who drives carefully, and defensively, you have likely never been involved in a car accident. However, you have noticed your car insurance rate has recently climbed, considerably. Calling your insurance company would be the best first step to take. You can find out if there have been any changes to justify the rate increase, by asking questions. It is possible that the insurance company has received information that could have an effect on your car insurance rates. Although you have not been involved in an accident, you should find out why your rates may have gone up.
A new car means new premiums
Your rates may go up if you have purchased a newer car. Even though they tend to be more reliable, the fact is that a newer car is more costly to repair after an accident. Taking out a loan to finance a new car will also cause the rates to increase, as most insurance companies require full coverage on a car that is financed. If your old car was not financed, and you only carried minimal coverage, this will seem like a large jump in price.
The term “actuary’ is probably unfamiliar to most people, but you might want to look it up when you see your new insurance bill. An actuary is a statistician who determines the premiums you will pay for your car insurance. To do this, the actuary studies data on a number of different factors such as the ages of drivers, conditions of various roads and highways, varieties of cars on the road, information concerning accidents, and many other things that may not seem important to the average person.
The actuary will calculate these data and come up with an insurance industry wide standard of pricing. If you live in an area that an actuary has determined should pay a higher rate, you have little choice, even if you have never had an accident, or a traffic ticket. Make certain your information is current when you get in touch with your insurance company.
You now have a bit more information that might have led to your increased rates. It is up to you to determine if you want to change your insurance company.
Filed Under: Understanding Insurance
