📈 The Frustrating Reality
You've had no accidents, no claims, no tickets—yet your insurance premium increases every year. It's not your imagination, and it's not entirely fair.
Reasons They'll Tell You (Some Legitimate)
📊 Rising Claim Costs
Car repairs, medical costs, and home rebuilding costs have risen 30-50% since 2019. More expensive claims = higher premiums for everyone.
Legitimacy: Real, but doesn't explain why YOUR rate goes up more than inflation.
🌪️ More Natural Disasters
Climate change has increased hurricane, wildfire, and severe weather claims. Even if you weren't affected, regional rates rise.
Legitimacy: Real, but some increases are excessive.
🏥 Medical Cost Inflation
Injury claims cost more as healthcare prices rise. Auto insurers pay medical costs in accidents.
Legitimacy: Real factor, especially for auto insurance.
🚗 More Car Theft / Crime
Certain vehicles (Kia, Hyundai) saw 1,000%+ increases in theft. Crime rates affect comprehensive costs.
Legitimacy: Real for certain vehicles and areas.
The Reasons They Won't Tell You
💰 The Loyalty Penalty
Long-term customers pay 14-32% more than new customers. Your rate goes up because they know you probably won't leave.
🤖 Price Optimization
Algorithms predict how much you'll pay before switching. If you're unlikely to shop around, you pay more.
📉 Investment Returns
Insurers invest your premiums. When investment returns are low, they make up profit through higher premiums.
📊 Credit Score Changes
Even small credit drops can increase rates in most states. You may not even know your credit score changed.
🎂 Age Factor
Your rate increases simply because you got older. Some age bands trigger automatic increases (especially 70+).
What You Can Do About It
📅 Shop Before Every Renewal
Get at least 3 quotes before accepting any renewal. This is the #1 way to fight rate increases.
📞 Call and Ask Why
Demand a specific explanation for the increase. Sometimes they'll find "retention discounts" to keep you.
🔧 Raise Your Deductible
Increasing your deductible from $500 to $1,000 can offset a rate increase. Just make sure you can afford it.
📦 Re-Bundle Policies
Sometimes switching both home and auto together gets better rates than staying for "loyalty."
📊 Check Your Credit
Errors on your credit report could be affecting your insurance score. Dispute inaccuracies.
🎓 Ask About Discounts
Defensive driving course, good student, low mileage, new safety features—make sure you're getting every discount.
When Increases May Be Illegal
File a complaint with your state insurance department if:
- ✓ Your rate increased more than the approved state rate change
- ✓ You believe you're being charged based on discriminatory factors
- ✓ The insurer can't explain the increase in writing
- ✓ You live in a state that banned price optimization but suspect it's being used
The Bottom Line
Some rate increases are legitimate (inflation, disasters). But much of it is loyalty penalty + price optimization—they charge more because they can. Your only defense is to shop every year. Don't assume you can't do better. Get quotes and let the numbers decide.