OnlineAutoInsurance.com Educates Consumers on Possible Reasons for Rate Hikes
A wide array of factors influences the pricing of auto insurance. In a new FAQ, some of these factors are discussed.
Columbus, OH, October 18, 2010 --(PR.com)-- An unexpected rate increase can be a shock to the average auto insurance consumer who has not acquired any new tickets, been involved in any new accidents or made any new changes to his or her policy. In the latest FAQ, the writers at OnlineAutoInsurance.com address the reasons that this might happen and examine some of the factors that influence a person’s rating.
Since auto insurance companies are, naturally, in the business of selling a product, they have certain profit targets that need to be met in order to remain financially viable. And, since the amount of premiums already written and the amount of money spent paying for damages will affect their bottom line, sometimes rates have to be adjusted to make up for previous losses.
There are many reasons why insurer’s profit margins may change. The policyholders that have been placed into a specific pool based on their risk profiles may have run up claims at a rate that outpaces the frequency which had been anticipated by the underwriter. Or perhaps an average amount of claims came in but with a level of severity that was higher than expected. Both of these possible trends are unseen by the policyholder but are closely monitored by the policy issuer. But, aside from problems with specific pools, insurers also sometimes see larger, portentous trends that have to be compensated for.
Since insurers deal with lawsuits and auto repair and health care facilities, rising cost-trends in these service sectors also affect the bottom line. The Director of the Ohio Department of Insurance, for instance, recently attributed upward rate trends to these factors. Responding to a 2.8-percent average premium increase from the state’s top 10 private passenger insurers last year, the director said, “Changes in auto insurance rates are associated with medical costs, weather-related claims, the number of cars on Ohio roads and repair costs.”
Source: http://www.insurance.ohio.gov/Newsroom/Pages/07192010OhioAuto.aspx
To access the full FAQ — which delves further into possible causes for a premium increase — readers can go to http://www.onlineautoinsurance.com/companies/ where policyholders who have experienced rate increases can also compare prices from other providers with the free online quote generator.
###
Since auto insurance companies are, naturally, in the business of selling a product, they have certain profit targets that need to be met in order to remain financially viable. And, since the amount of premiums already written and the amount of money spent paying for damages will affect their bottom line, sometimes rates have to be adjusted to make up for previous losses.
There are many reasons why insurer’s profit margins may change. The policyholders that have been placed into a specific pool based on their risk profiles may have run up claims at a rate that outpaces the frequency which had been anticipated by the underwriter. Or perhaps an average amount of claims came in but with a level of severity that was higher than expected. Both of these possible trends are unseen by the policyholder but are closely monitored by the policy issuer. But, aside from problems with specific pools, insurers also sometimes see larger, portentous trends that have to be compensated for.
Since insurers deal with lawsuits and auto repair and health care facilities, rising cost-trends in these service sectors also affect the bottom line. The Director of the Ohio Department of Insurance, for instance, recently attributed upward rate trends to these factors. Responding to a 2.8-percent average premium increase from the state’s top 10 private passenger insurers last year, the director said, “Changes in auto insurance rates are associated with medical costs, weather-related claims, the number of cars on Ohio roads and repair costs.”
Source: http://www.insurance.ohio.gov/Newsroom/Pages/07192010OhioAuto.aspx
To access the full FAQ — which delves further into possible causes for a premium increase — readers can go to http://www.onlineautoinsurance.com/companies/ where policyholders who have experienced rate increases can also compare prices from other providers with the free online quote generator.
###
Contact
Online Auto Insurance
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
Benjamin Zitney
909-784-2471 x111
http://www.onlineautoinsurance.com/
Contact
Categories