Customer Complaints on the Rise Concerning Insurance Premiums
Clearsurance.com recently published a report on one of the most common customer complaints regarding insurance, Why did my insurance rates increase?
While consumers are used to rising costs, sometimes it seems that insurance premiums are increasing at a rate that exceeds inflation. Clearsurance.com explains that several factors contribute to rising premiums. They also provide tips for how consumers can pay less for home and auto insurance.
Personal Factors Contributing to Rising Insurance Premiums
Some factors are based on the driver, and others depend on the insurance climate.
Claims History Could Cause Higher Premiums
One of the most common reasons car insurance rates increase is the policyholder’s driving record. If a customer has filed a claim in the past, statistics show that they’re more likely to file a claim in the future.
Additionally, if a driver has a history of traffic violations, they’re demonstrating driving habits that increase their risk of being in a crash and filing a claim that costs the insurance provider money.
Homeowners face similar repercussions after filing a home insurance claim. Their rates will typically increase following a claim.
Policy Changes Could Lead to Higher Rates
If a policyholder increases their coverage level or decreases their deductible, they’ll pay higher premiums to offset those benefits.
Insurance companies calculate premiums carefully so that they can remain competitive and solvent. They need to keep premiums down to attract customers, but they have to cover their risk of loss, so they make money and don’t go bankrupt.
Non-Personal Factors That Affect Insurance Rates
While there are things consumers can do about their personal factors and how they relate to insurance, Clearsurance.com points out that there isn’t much consumers can do about other factors.
The Weather Can Contribute to Higher Premiums
Individuals who live in an area prone to severe storms like hurricanes can expect higher insurance rates as insurance companies rebound from their losses following recent high-loss storms.
Some homeowners in high-risk areas find it challenging to find adequate home insurance coverage for wind damage.
The Rising Cost of Repairs Results in Higher Premiums
When an insurance company has the risk of higher repair bills, they have to charge higher premiums to cover that risk.
The added cost of home and auto repairs varies depending on the region where the policyholder lives. For example, those who live in the Northeast and Midwest have experienced higher repair costs than individuals in other parts of the U.S.
Insurance Fraud Makes Everyone Pay Higher Insurance Premiums
Experts estimate that insurance fraud costs the industry $40 billion a year. Unfortunately, consumers are the ones who absorb most of those costs by paying higher premiums.
While consumers can’t do much to affect higher premiums resulting from fraud, they can be vigilant and report cases of suspected fraud. If more insurance fraud is caught, costs could be lower for everyone.
High Crime Equates to High Insurance Premiums
Regions with higher crime rates have higher insurance premiums. Higher crime is associated with a higher rate of insurance claims. Since insurance premiums are based on risk, consumers pay higher insurance rates in areas with higher risk.
Moving one mile away can put a person in a zip code with higher or lower crime rates and corresponding insurance premiums than where they lived before.
Tips for Consumers to Lower Their Insurance Rates
Clearsurance.com urges consumers to compare insurance quotes. If a policyholder can find similar acceptable coverage from a different provider for a lower rate, they should consider switching providers.
Discounts are another way to save on insurance premiums. Consumers should review available discounts and ensure they’re taking advantage of all their eligible discounts.
Read Clearsurance.com’s full report here: Why did my car and home insurance rates increase?