You received your New York auto insurance renewal and noticed that the premium increased. Maybe it increased a little or maybe it was a lot. But you aren't happy about it and want to know why it increased. We understand that are you mad. But there are many reasons why this can happen.
Insurance is an important part of every budget. Constant care is required to protect your insurance rate from going up. Understanding what affects your insurance is the first step in safeguarding your rate. This blog serves as a guide to reasons why your auto insurance premium can increase.
1. Your insurance company raised their premiums
When you pay your premiums, it gets lumped in with other people paying their premiums. When claims are paid out, the claims are paid out from those same premiums. Insurance companies keep a minimum amount of premium in reserve for claims payments, which is required by NY state law. When the amount dips below the minimum, the insurance company raises premiums across the board to replenish the amount.
2. You have a few traffic violations
This is a common reason for your rates to go up. Some violations are worse than others. Major traffic violations (attempted felonies, open bottle, drag racing, etc) are certainly more severe than minor traffic violations (failure to yield, following too close, etc.). Getting a traffic violation shows that you are at higher risk of having an accident and incurring a claim. The more risk you carry, the higher your premium.
3. You bought a newer vehicle
You are driving a 15 year old car with liability only and you decide to upgrade to a newer car that is one-year old or a brand-new car. Most likely you will be adding comprehensive and collision coverage to that new car. You are adding coverage. Naturally your premium would increase.
4. You moved
Rates are calculated based on the zip code where you live. You move from rural farmland to the big city, your premium will increase.
5. Your credit score dropped
Many insurance companies base your insurance premium on your credit score. If you credit score drops, there is a possibility that your premium may go up.
6. You lost a discount
Most policies have several discounts already included. If you have several cars on a policy, you can receive a multi-car discount. If you reduce the number of cars to one on your policy, you will lose that discount. Some discounts expire, such as a discount for being accident free for several years. If you have an accident, then the discount expires. There are many possible reasons for losing a discount.
7. You had an at-fault accident
If you caused an auto accident and a claim is filed, your auto insurance rates will more than likely be increasing. Some companies do offer accident forgiveness, which allows you to have one at-fault accident claim per driver without an increase in premium.
8. You are older
Getting older does not always make your auto insurance go down. In many cases, you might see your auto insurance go up once you are over the age of 70.
9. You added a teenage driver
Adding a teenage driver to your policy is expensive. Getting his or her own policy is even more expensive. They are the most risky drivers on the road due to inexperience and frequency of accidents. When you add a new teen driver, you should expect a substantial premium increase.
10. You made a change to your policy during the policy period and you now see the impact at renewal
This happens all the time to us. You added a new vehicle with two months left on the policy period. You will pay the pro-rated premium for those two months. When your policy renews two months later, you will see the full cost of that new vehicle. It might shock you and look like your premium went up significantly. But, it didn't. In reality, you only paid premium for those two months and at renewal you will see the full impact of the change.
11. You had a lapse in insurance
A lapse in car insurance is not good. If you lapsed, it is usually possible to reinstate the policy with your current insurance company within a certain time. A fee is charged to reinstate your policy. Some companies give you a break if your policy has been lapsed for less than 30 days. Most insurance companies do not allow any grace period for a lapse in coverage unless you are trying to reinstate your policy.
12. You were non-renewed by another company
If you were non-renewed by one auto insurance company for multiple claims, do not expect another auto insurance company to forgive your claims and give you better rates. Those claims move with you from company to company.
13. Your insurance company made a mistake.
This does happen. The most common mistake is the removal of the multi-policy home and auto discount. A house is sold, so that policy is cancelled, but another policy is written for a different house. The discount is not applied back. It is best to check to make sure you are getting all your discounts!
Insurance rates are always changing. Many things go into calculating your premium and any slight changes can make a big impact. Knowing what will make your insurance premium go up will put you in a better position to prevent increases. Insurance companies can recalculate your rate at every renewal. Sometimes a rate increase has nothing to do with your actions. If you see a substantial rate increase without making a single change to your policy or driving history, it might be time to shop for a new policy.
Call us today at (845) 724-3031 or request an auto insurance quote via our website!
For more information
No-Fault Car Insurance In New York
Understanding Collision and Comprehensive Coverage
Full Coverage Auto vs. Liability Only
Should You Buy Extra Rental Car Insurance?