August 1, 2011

Why An Auto Insurance Policy Might Change For No Apparent Reason

There are many considerations that are included in determining auto insurance rates. Most have to do with actuarial calculations and little to do with your particular driving history. Most states have strict guidelines under which your auto insurance carrier can make a change in car insurance rates. Your provider wants to keep your business so if your premiums have gone up, you can be sure that there is a good and legal reason behind it.

Most of the causes for a change in car insurance rates are based on practical business principles. For example, it is not surprising for your auto insurance premium to increase after an accident for which you are at fault. The same is true for violations such as DUI or DWI infractions. Numerous additional factors can also be the cause of a change in your car insurance costs. Moving violations such as speeding tickets, illegal parking or making an improper turn are primary examples of why premiums are increased.

Other legal reasons for a change in car insurance rates by your auto insurance company are less obvious but still easy to understand. A customer who makes multiple claims is likely to experience a rate increase. So is one who adds a young driver to his policy or a driver with a poor driving record. Purchasing a new car can have an effect, especially if that car is more expensive or a model that is frequently stolen. Moving to a high crime rate area is legal grounds for a change in car insurance rates. Another reason that your auto insurance company may raise your premium is that it was granted a rate increase by the state since your last renewal date.

A few more acceptable reasons that may not be so obvious to you include: turning 50 years old, lowering your deductible, the mileage put on your car increased dramatically, you moved and have no garage in which to park your car. All of these make common sense. But look out for the ones that don't make sense to you. Your auto insurance provider must adhere to the law in these matters. It is their responsibility to inform you of an impending change in car insurance costs and to provide an explanation of the legal grounds for that change. If they don't, you have a legitimate right to ask for that explanation and keep asking until you are satisfied with the answer. You may not be pleased with the answers you get but you will at least be informed about what happened and why. If not, ask the state insurance commission for clarification.