You have had a good look around this time and managed to find a fantastic quote and now very happy with your policy choices. You may think that you are done for a while since you have arranged auto renewals as well. And you don’t need to worry about your policy as it will be rolling over. You are not alone to have these ideas in your head as most motorists think that they can just let their policies renew automatically.
Actually, if you see your rates are gradually coming down as you don’t make any claims you may be in the right place and carry on. However this is not always the case and more and more people find that their rates are increased. In some cases they have a pretty good idea why that may be and sometimes they may not have a clue. We will have a look at why companies can raise your rates and what it means in the light of timing.
Usually, policies are sold for a term of six months or a year. It would be a surprise to see if your insurer is requesting more money than agreed at the start. This may be due to mistakes made in premium calculations and can happen. But the main reason would be that they found a new information about you and taking it into account. Many states allow companies to make changes to policies within the first sixty days or they can even cancel the coverage. If they have found something that bothers them like too many traffic tickets or DUI committed by one of the listed drivers they have two options. Either they cancel the policy or ask for more money in line with the risk.
Usually it is more common to see premiums raised at the renewal period and this is understandable. Both insurers and policyholders are free to go their own ways once the policy expires. Most companies will do a recheck on their policyholders before they send a renewal quote. They will check credit score, accident records and DMV driver license files. If they find anything negative there they will make adjustments to terms offered.
The good news for motorists is that companies have to explain why they are increasing your premium. Asking the question would be a good start when you see a rise on costs. It is possible that company decides to increase rates because they suffered too many losses last year due to claims. In such cases, you may check other providers and see how their prices fair against your renewal. You insurer may have really been over competitive last year and charged you too low.
In each cases, you are free to look at your alternatives. And it would be smart to look at them in the light of your current situation. You should see this as an opportunity to have a look at your policy coverage and make sure it is still relevant to you. Prices do go up and you may have to deal with it.