Why are my auto insurance rates increasing in Idaho, Washington, Montana, and Arizona?
Why are my Insurance Rates Increasing?
One of the questions we get asked all of the time at jan jesberger insurance is “ Why does my auto insurance continue to increase all of the time,I haven’t been in any accidents and my vehicle is getting older?
There are many reasons this happens but the bottom line is that it’s not all the insurance companies fault.
There is a perfect storm of reasons that auto insurance rates continue to rise, let’s first look at how insurance rates are calculated.
How Insurance is calculated
One of the first things that we need to understand is that rates are not solely based on the type of vehicle you drive, literally hundreds of factors go into the pricing of your rates some of these include, but are not limited to
Well, maybe the last one isn’t true, but this partial list gives you the idea that almost any measurable factor plays into how actuaries calculate lists. (When I talk to young math majors, this is one of the careers I tell them to investigate.), Defining risk is a hard thing to do, but in this era of big data it is certainly becoming more and more quantified.
The Law of Large Numbers
It is important to take the 20,000-foot view when you consider insurance rates. Think of your insurance company as a large pool with millions of people. When your rates go up it usually has little or nothing to do with you. One of the simplest calculations is the how much the pool pays in versus what they pay out in claims. Just think of all the vehicles that were a total loss during the devastating hurricanes that hit Texas and Florida recently.
When your rates increase it isn’t the insurance company picking on you. They are adjusting your rates and everyone else’s this is also known as at rate increase. Base rates need to be increased to help to keep the equation of income and expenses in balance.
What are other factors that increase our rates
Consider the following reasons for increased insurance rates
Distracted driving-I remember that my Dad told me that when they first put in radios in cars that many were worried that this would contribute to accidents, now many new cars come with 7-inch video screens. Every time I look in another car, someone is texting, eating, or putting on makeup.
Lawsuits- This should be obvious but how many of you know a personal injury attorney’s phone number by heart? Now after you think about it and say their jingle in your head, raise your hand. This just shows the power of advertising because I can’t even turn the TV on without seeing at least 3 different personal injury attorney’s commercials. Who do you think is paying for all of that, you guessed it, the insurance companies which means YOU.
Medical Costs- We all know the mess the health insurance industry is in and part of the reasons are very similar to the auto insurance industry. Increased medical costs have driven insurance premiums up for years.
Repair Bills- The cost to repair your vehicle has risen due to the high tech features each vehicle now has. No longer can you fix a bumper for $800 with the sensors and features they have. You need to replace more parts than repair and it the old days, that wasn’t the case.
Bottom Line
Insurance companies are not the only ones to blame in our changing world. Insurance is not a commodity. When you trust jan jesberger insurance to meet your insurance needs, you know that we will find the correct fit, at the best price for you and your family. Do you really want to trust your assets to someone who is ill trained sitting in a call center, maybe in the U.S., maybe not, when you can call us at 208-762-2122 and we will care for you properly, and for the best price?