I haven’t been in any accidents or received any violations, why is my rate going up?

The cost of insurance is affected by more than your personal driving history.  Multiple factors go into rating auto insurance premium, including what’s happening in the market overall.  

The auto industry is unfortunately experiencing higher-than-expected claims.  Multiple factors are causing claims to be on the rise.  One of those factors is distracted driving.  In addition, each of these claims on average is costing more than ever before.  Today’s vehicles are standardly equipped with so many advanced technologies, which are forcing up the cost of product replacement as well as labor.  Mechanics are no longer just replacing a bumper during a fender bender.  They are replacing a bumper, a sensor, and a camera.  More expensive parts and more advanced skills are required for each job.  This ultimately results in an auto insurance premium increase and it’s happening industry-wide.  Insurance companies must increase premiums to ensure that they are able to pay future claims.  

A few more examples
The improving economy, the rising cost of medical care, weather-related occurrences, and increasing fraudulent auto insurance claims are all additional factors contributing to these increases.  

When gas pricing is lower and people feel more financially confident, they tend to drive more which of course increases the number of accidents.  As medical costs increase, this also gets factored in to the overall cost as bodily injury claims go up substantially.  Fraudulent claimants pursuing extremely high payouts in cases that don’t warrant such action also have a rather large impact on rating.  

My record is clean.  Why do I have to pay for other people’s accidents?  

A clean driving record is still a great thing to maintain, as it affords you one of the many discounts from which you can benefit.  Kudos to you for being a good, safe drive and for gaining that discount.  However, keep in mind that when you purchase an insurance policy, you are essentially signing a legal contract that joins you with a pool of drivers in your demographic and your geographical area that all share the cost of accidents and other claims.  Insurance companies determine your premium not only based on the information you provide about yourself and your car, they also use historical data about others like you. 
 
Will my rates go down if the industry climate gets better?

We wish we could predict the future and give you a straight yes on this one.  We too experience the same set of circumstances when it comes to our auto insurance rates.  Unfortunately, we’re unable to provide that answer definitively. The only thing we can say is that insurance carriers are striving to be as competitive as possible.  One of their main goals is to be cost-effective while ensuring that they are collecting sufficient premium to cover the cost of future claims. 

It’s important not to make rash decisions if you see an increase.  If you move your business, you may find a similar set of circumstances, as this is a universal occurrence.  The chance you take there is that you may not wind up working with insurance professionals who have your best interest in mind.  You may also sacrifice other benefits like multipolicy and tenure discounts.  Not to mention, if you go with a company that only has access to one product, you may find a savings right off the bat; but if the rate goes up, you have no options for change. 
 
I can’t afford this.  What can I do?       

First, you should start by communicating with your agent or Account Manager.  Ask them to review your coverage if they haven’t already done so.  They will be looking for opportunities to reduce cost if they see any out-of-line price increases.  

A review is a great thing to have as life changes year to year.  You may be eligible for savings that you previously were not eligible for.  We always welcome these conversations.  The more we know, the better we can help you.  Your agent or Account Manager may also have other suggestions on how to save that you can consider and weigh against your personal circumstances.  

Contact V.F. McNeil Insurance today at (203) 481-2684 with any inquiries you might have.