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Oct 25, 2016

Why Companies Raise Their Rates Even If You Don’t Have an Accident

So you’ve haven’t had any accidents, traffic violations, parking tickets, and of course, no claims. If that’s the case and your auto insurance rates are still increasing, you’re probably wondering why you’re being punished for no reason. Yet, insurance companies raise their rates all the time for a variety of different reasons that are largely out of your control. While most states have a law that says that insurance companies can only raise their rates by a certain percentage to prevent gouging, Arizona does not. If you live in Arizona, your insurance provider has the option of raising your rates by more than 50%. Regardless of where you live, it’s important to know why your rates are on the rise.

Trading Up

One of the things that you can control is what car you drive. If you’ve recently switched to a new vehicle, that’s probably one of the biggest reasons why your rates have increased due to the added value of the car. However, a car with top safety and security features may reduce your rates.

Changing Statistics

Part of your rate is based on where you live. If you live in an area where auto accidents are on the rise, the insurance company will raise your rates to cover the added risk. Changing demographics and average income levels in your area might also be a contributing factor.

Massive Fees

Insurance companies have a lot of overhead. If the company has had to shell out a great deal of money to another customer, they will raise the rates on all of their customers to make sure that they make up for the loss in revenue. This is also true if the company has had to pay some hefty legal fees or medical expenses over the last year. If the company is facing a massive lawsuit, they’re likely spending a fortune on legal representation and will need to make up the difference. Your insurance provider might also be making up for the rise in the cost of medical care.

If you’re tired of rising rates, you can always shop around to find a lower quote. You’ll find dozens of auto insurance quotes at Summit Insurance Advisors


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Scottsdale office

5425 E Bell Road Suite 103
Scottsdale, Arizona 85254

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