I am an agent for one of the largest insurance companies in America. Your premiums pay the claims for every other person, so when more people report claims, your rates will increase. I get this question all the time..."I've not had any claims, so why are my rates going up?" Insurance companies are a business, and they expect to make a profit. When claims increase, rates do as well to cover that. I know most people think "those greedy insurance companies are raising my rates so their profits go up", but the reality is that in insurance, the profit margin is usually 1-3%, so you are not being gouged. However, when you see the ads saying "we can get you a free roof", what they are saying is that we will get your insurance company to pay for the roof which means 1) you now have a claim against your record which will affect your rates and 2) since more claims are being paid, rates for everyone will also increase. it's a vicious cycle, nothing is "free".
|