Reader’s Question:

I was surprised to receive a notice informing me that my insurance carrier made certain changes to my policy. What could be the reason for sudden increase of vehicle insurance rates?

Andrew

Indianapolis, IN

Vehicle insurance rates are affected by a variety of reasons. These reasons have something to do with what you do – a change in lifestyle, status, modification of vehicle, or simply had something to do with your demeanor or your driving discipline. These factors could directly affect how your premiums are determined. For example, senior citizens are eligible for multiple discounts but because of the risk attached to them, they end up paying more for premiums. In contrast, teenagers aren’t eligible for this discount (but of course!), and insuring teen drivers would prove to be much expensive than the norm.

Lifestyle and status also play a major role in defining your vehicle insurance rates. For example, married couples enjoy the benefits of multiple car discounts or joint policies. They can enjoy certain discounts if they merge their policies into a single policy. The number of drivers added to your policy would also affect your premiums. For instance, if your family is growing, and your son is already learning to drive, you are obliged to include them into your policy. Insuring a teen driver would also prove to be expensive and you could expect a 50% to 100% rise in premiums.

Statistics affects the way your vehicle insurance rates are decided. Statistics in relation to your driving record are mainly given consideration for increase or decrease of premiums. State laws also define your insurance cost as the state usually set the required minimum limits to your insurance, and it extends to anyone under their jurisdiction.