Whether anyone wants to admit it or not, insurance consumers tend to seek ways to reduce their insurance expenses while insurance providers are always looking for ways to increase their revenue.
A rate increase is one alternative insurers might use to increase your premium but more often than not your premium frequently increases for other reasons. An insurer's base rates are only one factor that goes into the calculation of your actual insurance premium. You should know what those factors are.
The most common factor may be an increase in your amount of insurance. Your insurance company may claim construction costs in your area have increased and your amounts of insurance have been increased accordingly. That may be true but higher limits don't always mean higher premiums.
Discounts they may have applied in prior years may have changed or been discontinued. Penalties may have been applied if you had a claim or your credit score has changed. Rate categories may change as your home gets older. The reasons can be endless.
But that doesn’t mean you have to simply accept the increase. Question the reason for any increase. Determine if you are eligible for other discounts or credits. Consider other insurers who might offer you more favorable premium treatment.
In my experience, insurers rates don’t change all that often, and they can go up or down. Other factors used to calculate your final premium are usually the reason you see your premiums go up so often. Be proactive, a little effort and a few questions could save you a lot of money.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
An insurance company can change its rates by filing with your state insurance commissioner. If they are requesting an increase they must demonstrate that they have experienced claims in excess of their premiums. That is the way rates change. Policies often have a clause that calls for the coverage to be increased at each renewal to keep pace with the cost of construction. This will normally result in an increase of 3% per year.
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Whether anyone wants to admit it or not, insurance consumers tend to seek ways to reduce their insurance expenses while insurance providers are always looking for ways to increase their revenue.
A rate increase is one alternative insurers might use to increase your premium but more often than not your premium frequently increases for other reasons. An insurer's base rates are only one factor that goes into the calculation of your actual insurance premium. You should know what those factors are.
The most common factor may be an increase in your amount of insurance. Your insurance company may claim construction costs in your area have increased and your amounts of insurance have been increased accordingly. That may be true but higher limits don't always mean higher premiums.
Discounts they may have applied in prior years may have changed or been discontinued. Penalties may have been applied if you had a claim or your credit score has changed. Rate categories may change as your home gets older. The reasons can be endless.
But that doesn’t mean you have to simply accept the increase. Question the reason for any increase. Determine if you are eligible for other discounts or credits. Consider other insurers who might offer you more favorable premium treatment.
In my experience, insurers rates don’t change all that often, and they can go up or down. Other factors used to calculate your final premium are usually the reason you see your premiums go up so often. Be proactive, a little effort and a few questions could save you a lot of money.