Why do insurance premiums go up? In the insurance industry, the majority of people expect to pay the same premiums the following year, which has never been the case. As the details show, insurance premiums tend to go up every year, so policyholders must spend more than they had planned. So, what causes your insurance premium to go up?
1. Low Credit Score
A low credit score has been causing the majority of insurance premiums to go up. If you have poor credit, most of the time, it will result in your insurance premium rate automatically going up. Generally, a score of 630 is considered to be poor credit. If you have bad credit, it will result in your insurance premiums going up, but you may also be refused coverage altogether.
2. Accidents or Violations
Your premiums are generally calculated based on your accident levels and violations in the insurance industry. If you have had any accidents or violations in the past, your insurance company will likely raise your rates. The number of accidents or violations you have had in the past will play a significant role in how much your rates are increased.
3. Age
As we age, our insurance premiums go up. As you get older, you’re likely to get into accidents. In addition, as we age, our eyesight and hearing begin to deteriorate, which can also lead to accidents. Also, older drivers are more likely to have health problems that affect their driving.
4. Gender
Studies have shown that men are more likely to get into accidents than women, which is why insurance companies charge men higher premiums. In addition, men are also more likely to drive faster and take more risks than women, leading to accidents.
5. Marital Status
If you are married, you will usually get a discount on your insurance premium. This is because married couples tend to be more responsible and have fewer accidents than unmarried drivers. In addition, if you are married and have children, you will also get a discount on your insurance rates. You should remember this if you are considering getting married.
6. Location
Where you live also plays a role in how much you pay for insurance. If you reside in rural areas, you will usually pay less for insurance than in an urban area. This is because there are fewer accidents in rural areas and less traffic. In addition, rural areas have better roads and are less likely to have potholes, damaging your car.
7. Inflation
Economic changes can also cause insurance premiums to go up. For example, if the cost of living goes up, the cost of repairs will also go up. In addition, if there is an increase in the number of accidents, insurance companies will have to pay out more money in claims, which will also cause premiums to go up.
Conclusion
There’s always an argument that insurance companies are just trying to make more money. While that may be true, there are many reasons why insurance premiums go up every year. Call Harvey Sarles Insurance Agency for professional customer service.