Changing Insurance Rates
Have you noticed changes in your insurance premiums? Insurance premiums can increase or decrease annually based on several different factors. These factors can be personal, like if you undergo a major home renovation or add a teen driver to your car insurance policy, or external, like technological advancements or economic changes in the world around us. To help you better understand how and why your premium may change, here’s an explanation of some of the factors that can influence your home and auto insurance rates.
Home Insurance Rates
When it comes to determining the insurance premium for your home insurance policy, elements such as your coverage limits, deductible, insurance history, the age of your home, and your home value are all considered annually. Any changes or adjustments you make can result in a change to your insurance premium. Other factors that affect your home insurance rate include the following:
1) Regional Factors
Changes to weather patterns, geography, or an increase of catastrophic events such as hurricanes or windstorms can all affect the rate of your home insurance premium. The proximity of your home to emergency services is also taken into consideration when determining your cost of insurance, so if these services move further away or closer to your home, you could also see a change in your premium. Lastly, local and regional crime trends can increase or decrease the risk of owning a home in a specific location, which in turn can increase or decrease your insurance rate.
Technology can also influence home insurance rates in a number of ways. Installing things like alarm or home security systems and safety devices like smoke and CO detectors not only make your home safer, they can also impact your insurance premiums.
The third factor that can influence your insurance rate is the economy. Inflation, rising home values, changes in material costs, and changes in local building codes are all taken into consideration when determining your insurance premium.
Auto Insurance Rates
The same personal factors that impact home insurance rates can also influence your auto insurance premium. For example, adjustments to your policy such as changes to your deductible, adding another vehicle, adding another driver, adding a teen driver, or changes in your payment plan all affect your insurance rate. In addition to policy changes, your history of claims, accidents, and tickets along with things like the age of your car, your age, or the location where your car is registered and garaged can also impact your car insurance rate. Just as personal factors can affect your car insurance, the same is true of macro factors that may be out of your control. The following can also influence auto insurance premiums:
1) Regional Factors
Just as with your home, if your car is registered and garaged in a location that experiences catastrophic weather events, your car is at greater risk of a claim — a factor that can affect your insurance rate. In addition to weather, driver trends and population changes can also influence insurance rates. For example, as distracted driving becomes a more prevalent problem with drivers today, rates of accidents increase, along with insurance premiums.
As technology advances, cars may become smarter, but they also become more expensive to repair. Backup cameras, lane-departure assistance features, or rain-sensor windshield wipers are all examples of advanced technology that require computers and expensive parts to fix, repair, or replace in the event that they are damaged or destroyed in an accident.
We once again see that economic trends can dictate car insurance rates. For example, high employment rates can lead to more drivers on the road. With more drivers on the road, there is an increased risk of accidents, which in turn can lead to changes in your insurance premium. Inflation can also increase the cost of materials needed to fix cars after accidents, which again impacts insurance rates.
Here at Bearingstar Insurance, we understand that changes in your insurance rates can be confusing, which is why we’re always available to help. If you have questions about your home or auto insurance coverage or rates, a local Bearingstar agent is happy to assist. Visit our website and reach out to your local office today: http://bit.ly/2Kdp2vm
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