Auto insurance

Why have my auto rates changed?

Friday, March 24, 2017by  Jaime Layng

couple looking upset over a billQ: My rate has increased, what's the cause of this? Have I done something wrong?

A: Whether a customer’s rate has increased or decreased, it's natural to want to know why. The answer depends on your specific situation so it's not possible to give a broad answer that applies to everyone, but here are some common factors that often come into play.

  • Have you moved recently? Some folks are surprised to learn that their locale affects their rates. The general rule is that in busier, more populous areas, auto rates will be higher than in rural, lower-traffic areas. The frequency of losses is higher in areas with a high number of vehicles on the road, and because insurance is a shared pool that we all pay into, the rates will generally be higher for individuals living in those locations.

  • Has your vehicle usage changed? The annual mileage you put on your vehicle is one of the factors we consider, so if you changed your driving habits recently that could have changed your premium.

  • Has activity on your driving record changed? Tickets and accidents can impact your auto insurance rates, so a new ticket or accident on your driving record could have increased your bill.

  • Did you add or remove a car recently? Such a change can affect more than just the particular vehicle you added or removed. For example, if you have more cars on your policy than the number of drivers, the risk per vehicle is less since at any given time there may be one or more vehicles sitting at home unused. As a result, adding an extra car might not cost as much as you think! Likewise, if you remove an extra vehicle there can be additional risk placed on the other cars, raising those vehicles' costs even while your overall premium goes down. Generally you’ll pay a higher total premium to insure more vehicles, although the cost per vehicle may drop if there aren't enough drivers to use them all.

  • Did you change your policy's payment plan? We offer a Paid In Full Discount when you pay your auto policy annually or semi-annually. If you changed onto or away from one of these payment plans, you may have gained or lost the discount.

  • Have your credit habits changed? A credit-based insurance score is one factor that influences your rates, so a change in your credit habits may contribute to higher or lower premiums. Depending on your policy type and the state in which you live, we may check your credit-based insurance score periodically to get an updated snapshot. For more information about how credit relates to your insurance premiums, check out our Insurance Score FAQ.

  • Have you filed any claims? Any claims filed have the potential to impact your rate, even if your claim is for something you don't feel personally responsible for. A tree falling on your car, the cold weather causing a crack in your windshield that requires replacing the glass, or a bear chewing up the fresh leather seats in your new car all have potential to impact your rate if a claim is filed.

  • Is your policy renewing? Some factors that affect your rate, including some of the points listed above, might take effect only at the next renewal rather than in the middle of the term. A few examples of things that don't alter your rate until renewal include tickets or accidents on your driving record, new claims filed, company-wide rate changes, industry changes in how your vehicle’s risk is assessed (e.g., updated safety or collision statistics), and the age of drivers on your policy.

Each policy's rate reflects a combination of a wide variety of factors, so that no two policies are the same. While this complexity makes it difficult to paint rate increases or decreases with a broad brushed explanation, it also allows for us to tailor your rate to your unique combination of factors. If you've seen your rate go up or down and aren't sure what prompted it, don't hesitate to contact your agent or our Customer Service Department for more information.

Share on social media

Comments on this post

personPEMCO06/29/2018 11:02 AM
Re: home insurance increase, our team says the amount of coverage (Coverage A – Dwelling) estimated to rebuild your home has increased. The coverage increase is to keep up with  material and labor costs and to ensure your home is adequately insured.
personPEMCO06/29/2018 11:00 AM
Brett -- We know it's very frustrating when rates increase, especially when you haven’t had any new accidents, tickets, or claims, or otherwise made changes to your policy. There are other factors that affect your rates, though – things like more drivers on the roads, which increase your likelihood of a crash (no matter how great a driver you are). Vehicles are also becoming increasingly sophisticated, and as a result are more expensive to repair or replace than in the past. And rising medical and liability costs are contributing to increased rates, as well. But before you make a decision to switch to a different insurer, we hope you'll let us go over your policy with you to make sure you have the right coverage and are getting all the discounts you qualify for. Please give us a call at 1-800-467-3626 when you get a chance and ask for Customer Service.
personBrett Thomas12/17/2017 09:11 AM
Just received my auto renewal...  absolutely none of the listed factors has changed and the premium went up ...wait for it.... FORTY!!! PERCENT!!! I need a very good explanation to not start shopping for a new carrier. By the way , my homeowners rate went up 25 %. I await your response.

Add your comment

At PEMCO, we believe that maintaining the confidentiality of personal information is a fundamental responsibility. View our privacy policy.