Why Are Insurance Renewals increasing?! We’ll help you understand the Factors Behind Rate Increases Without Claims
Why insurance renewals continue to increase and what in the heck reinsurance is.
The hope is to help everyone understand one more reason insurance rates continue to increase at an alarming rate. So today, the focus is on reinsurance.
Factors Influencing Auto Insurance Rates
First, auto insurance companies price their rates based on a number of factors. Sometimes these cost factors go up, and sometimes they go down. In most states, costs are currently rising.
Sometimes you can control what you are paying for. For instance, if you add another car or a teenaged driver to your policy, your costs will increase. Alternatively, your costs will decrease if you drop either a car or a driver from your policy.
External Factors Affecting Your Rates
But the thing that is very frustrating are the factors outside of your control that could cause rates to increase, such as the crashes other people are involved in.
The number of crashes, and the cost of these crashes, are a component of auto insurance rates.
For example, drivers living in large metropolitan areas are likely to pay more. This is simply because more cars, therefore more crowded roadways, increase the number of car crashes in those cities. On top of all that, speed limits are also being raised. Speed is the single-biggest contributor to crashes in which driver error is cited as the cause.
Impact of Distracted Driving
A personal pet peeve of mine is distracted driving, and this is an issue everywhere. In big cities and small, people texting, talking, or otherwise occupied with another activity while driving is being blamed in part for more crashes.
Comprehensive Coverage Costs
Auto insurance covers more than vehicle repair. It also covers the cost of injured crash victims’ medical care and lost wages, as well as the repairs and/or replacement of vehicles and any property damaged in a crash. In recent years, medical and auto body repair costs have increased at a rate much faster than inflation. Legal costs have gone up, too.
Increased Driving Activity
Another trend affecting the cost of auto insurance is that with the unemployment rate falling and the pandemic ending, more people are driving both to and from work. And with more disposable income, they are presumably driving more for leisure.
Future Prospects and Hope
But there is hope in the future. Auto insurers are committed to reducing U.S. crash rates. They fund the Insurance Institute for Highway Safety, and they support efforts to combat distracted driving as well as drunk or drugged driving with technology built into new vehicles.
Reinsurance rates should be decreasing by the end of 2024. Not sure what reinsurance rates are? Check out my video on reinsurance rates linked in the description below.
Finding Savings with Trailstone Insurance Group
And your best bet for savings? Call us here at Trailstone Insurance Group. We work with more than 40 insurance companies and do all the shopping for you, so we will find you the best pricing and coverage available. There is no cost for our service as we are paid by the insurance carrier.
The best part of Trailstone working with 40 plus insurance companies is discounts, lots of discounts—more discounts than if you only work with one company like USAA, State Farm, or Progressive.
Our team of specialists will make sure you have every discount you qualify for, and this will help reduce your auto premiums immediately.
Give us a call today or use the link at the end of the video to get a quote.
Until next time!
FAQs
Why did my insurance rates go up even though I didn’t have a claim?
Insurance rates can increase due to a variety of factors beyond individual claims, including the overall number of crashes, rising repair costs, medical expenses, and increased driving activity in your area.
How do external factors like crashes affect my insurance rates?
Even if you haven’t filed a claim, the number of crashes and their associated costs in your area can influence overall insurance rates. More crashes mean higher costs for insurers, which can lead to increased premiums for all policyholders.
What role does distracted driving play in insurance rate increases?
Distracted driving is a significant contributor to the increase in car crashes. As the number of accidents due to distracted driving rises, insurance companies adjust rates to cover the higher risk and associated costs.
How can I find better rates if my insurance renewal goes up?
Working with an independent insurance agent like Trailstone Insurance Group can help. We compare policies from over 40 insurance companies to find the best coverage and pricing for your needs.
Are there any upcoming changes that might lower my insurance rates?
Reinsurance rates are expected to decrease by the end of 2024, which could lead to lower insurance premiums. Additionally, advancements in vehicle safety technology funded by insurers aim to reduce crash rates over time.
How can Trailstone Insurance Group help me save on my insurance?
Trailstone Insurance Group specializes in finding discounts and comparing rates from multiple insurance carriers. Our team ensures you get the best coverage at the most competitive price, without any additional cost to you.