Why Did My Insurance Increase?

Insurance premium increases are a fact of life. There are numerous reasons why an insurance company may raise your premiums, even if your coverage levels remain the same.

Purpose of Premiums

Insurance companies use premiums to fund operations and pay for claims and policy service. Premiums ensure that the company can continue to pay policyholder claims. As the company's claims experience increases, so do the premiums.

Auto Insurance

Your auto insurance premiums can increase because of accidents, moving violations, claims or a change in address. A premium increase may also be the result of the insurance company's overall claims experience in your state.

Health Insurance

Premiums for an individual health insurance policy can increase because of the dollar amount of medical claims you have filed. Group insurance rate increases are typically the result of the claims activity of all those enrolled in the group.

Home Insurance

Home insurance rates typically increase because you have filed claims for property damage. An insurance company can also raise these rates based on its claims experience in your area.

Life Insurance

Life insurance rate hikes typically occur when your policy period has expired. This is because life insurance rates are based on your age at the time the policy begins or is renewed.

References

• CarInsurance.com: How Does Your Auto Insurance Increase?
• Agent Zoo: How Does Health Insurance Work?
• Homeowners/Renters Insurance Center: What Increases Rates?