If you are like most consumers, increases to your car insurance rate often leave you confused and frustrated, particularly when the root cause isn't clear or explained. Although there are several reasons your car insurance premiums may be on the rise, the following are some of the most common:1. Your current insurance company has been approved for a rate increaseThe Financial Services Commission of Ontario (FSCO) recently released the approved auto insurance rate increases for the first quarter of 2010. A number of insurance companies received approval for increases, some as high as 24%, while others had no rate increases at all. To check if your current insurance company was approved for a rate increase, click here
2. You have a new home addressWhere you live affects your car insurance rate. In a highly populated city, there are a typically more car accidents, and therefore more claims paid out by insurance companies. As a result, insurance companies on average charge more for car insurance in a big city than in a less populated small town. 3. You are driving a new carThe type of car you drive also impacts your car insurance premium. All things being equal, you should probably anticipate a higher insurance premium if you switch to a more expensive car or a newer model. If you happen to change your vehicle in the middle of your policy term, you will receive documentation advising you of the difference in premium for the remainder of your policy term. When you receive the renewal for your policy, you will then see the new annual rate for your new vehicle. 4. You added a new driver to your car insurance policyHas your son recently received his driver's license and been added to your car insurance policy? If this occurs part way through your policy term, you will be charged a partial premium at the time of adding the new driver. A full premium increase which includes the additional driver will occur on the renewal date of your car insurance policy. 5. You've had to make a claimMaking a claim where you are deemed to be "at-fault" will increase your car insurance premium. Most insurance companies will not increase your premium during the policy term, but will wait until your renewal date. Some insurance companies offer "accident forgiveness" coverage, which prevents an increase in premium while you are with that insurance company if you have to make an "at-fault" claim. However, if your current insurance company does not offer this, or if you switch insurance companies after using this coverage, you will see an increase in your premium. The only other instance in which you will not see a premium increase after making a claim is if you're deemed "not at-fault" by the insurance company.Knowing some of the most common causes of rate increases will not only reduce the initial shock of a potential increase, but will also serve as an indicator of when to start shopping around for a better rate. Every insurance company has a different rate for every driving profile. So if your circumstances have changed, now is as good a time as ever to see if you can find a better deal. Online comparison sites like InsuranceHotline.com can help by getting quotes from over 30 companies. Its fast, safe and best of all it is completely free to use.
