Summit Insurance Advisors
by Michael Harbron on Jul 22, 2020
You’re an excellent driver – you’ve had no tickets, filed no claims, and had no accidents. In this scenario, anyone would expect their rates for auto insurance in Phoenix to be at rock bottom – especially with the coronavirus pandemic raging on.
Auto insurance companies in Phoenix and across the nation have been reimbursing customers various percentages of the premiums they pay for coverage over the past few months. The reason being that with stay-at-home orders and store closings, people are driving significantly less than they were pre-pandemic. These discounts range from just a few bucks on up each month, depending on the provider.
However, some people notice that despite the current goings on and despite them having a spotless driving record, their rates are increasing. Car insurance companies raise their rates on a regular basis for a lot of different reasons, and most of them are beyond the control of customers. Many states have laws stating that rates can only be raised by a certain percentage, but Arizona isn’t one of them.
Here are a few reasons why you might be noticing an increase in your premiums for auto insurance in Scottsdale or Phoenix:
Part of the premiums people pay for auto insurance coverage is based on the location in which they live. Basically, when the number of accidents is on a downward trend, your rates might drop accordingly. At the same token, if accidents are on the rise, the insurance company raises rates paid by customers to cover the added likelihood of increased risk. Other area statistics that affect rates include average income levels and demographics, as well.
It takes a lot of money to run a business – and it’s no different for insurance providers. They have a lot of overhead. If a customer makes a claim and the company has to pay a large sum of money for the claim, the provider might increase everyone else’s costs to cover that loss in revenue. Unfortunately, this could also happen if the company had to pay steep medical expenses or legal fees over the last year – the cost of medical care is increasing, and if the company is facing a big lawsuit, they’ll need to cover their legal fees by raising customer premiums for auto insurance in Scottsdale or Phoenix.
One of the factors that will almost certainly increase your premiums has to do with the car you drive. The more expensive a vehicle is to purchase, the more expensive it would also be to replace. Therefore, you’re going to pay more for vehicles that have a higher sticker price than others. This holds true for any new or used car – a sports car is going to cost you more to insure than a mini van of the same year, because it’s riskier to drive a sports car and more costly to replace. This means the insurance company is taking a bigger risk. Keep in mind, though, that a car that has top security and safety features installed will win you big discounts on your auto insurance in Phoenix.
When all is said and done, it still is very much to your benefit to remain a careful, claim-free driver. While some drivers are seeing lower rates during the COVID-19 pandemic, there are others whose rates are still increasing for any of the reasons mentioned above. You’ll earn some hefty discounts by limiting your claim and ticket activity over the years. If you’re interested in seeing what options you have with companies other than the one you’re currently with, check out our no-obligation online auto insurance quote page.
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