Why did my rate go up?!


Why did my rate go up even though I haven’t changed anything or had a claim?

Let’s talk big picture – insurance is a transfer of risk.  That means your risk is pooled together with a great number of other policy holders who have similar characteristics.  Your individual rate is based on data that really smart number crunchers called actuaries have determined segments you from the big pot of all policyholders - but let’s not get ahead of ourselves.
Big picture all the premiums we pay as policy holders go in a bucket.  Out of that bucket comes the cost of claims made by the policy holders and expenses to run the insurance company.  The cost to run the company remains relatively stable, so the variable is in the claims.  Not my claim, or yours, but all of our collective claims.  If there is more money being taken out of the bucket than being put in, ALL of our rates are increased to make sure there is always money in the bucket to pay the bills.

So that’s generally why rates go up, specifically your rate is determined by a great number of individual factors that change every year.  Sound confusing?  It is, and if you don’t have someone you can trust to discuss it with it’s pretty frustrating to.  Luckily, you have us!

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