Why Did My Insurance Rates Increase for No Reason?

Insurance companies take many factors into account when quoting rates for home, auto, life and other types of insurance.  These rates can go up over time, even when your circumstances remain the same, such as your vehicle type, location, etc.  Read below for an explanation on why this might happen to you.

Q:    I’ve had the same house and cars for years without a claim. Why did my rates just go up for no reason?

A:    On homeowners, and many types of property insurance, the insurance company automatically increases the insured limit for the structure(s) to keep pace with the inflation rate of construction costs. Often this is the primary reason for the increase in premium.

However, few agents will give you “the rest of the story”.   In actuality, every insurance company, every year, makes different “bets” (so to speak) on what risks they allow in, and at what pricing levels.

If they get lucky (or smart), and they have a good year (weather-wise, fire loss-wise, liability-wise, and with their investments), they end their year with a profit.  They may take this as an opportunity to lower rates in an attempt to gain more market share the following year.   If they are unlucky (or not very smart), and get hit with heavy weather claims, large fires, big liability losses or poor investment returns, they end up in the red.   In this case, they’ll often pull back on their writings by increasing pricing and tightening their underwriting in hopes of increasing their profitability.

It is this back and forth that can impact your insurance premiums, and may have little or nothing to do with you individually or with the risk characteristics of your particular property or vehicles.


Here at Ross Insurance, our team works hard to seek and find insurance companies who display consistency in their pricing and underwriting to avoid large swings one way or the other.  When we spot an unusual uptrend in pricing, this may be a sign of long-term bad decision-making on the part of the insurance company underwriters, so we start looking for other alternatives and shop around for better options.  This is the beauty of an independent agent – one who has many different insurance companies to choose from.  Agents who represent or focus on just one particular insurance company will rarely, if ever, offer you something different.

If you’re looking to explore your options for insurance carriers, the best way to make sure you receive the right coverage, for the best price is to contact Ross Insurance Agency.  Our Ross Review is a great way to ensure you are not overpaying for coverage you don’t need, or paying too much for the coverage you do.  Contact us today to schedule your review.