Is it that time of year again? Your car insurance policy is up for renewal and you are crossing your fingers hoping for a price reduction. Unless an accident or violation has come off, you are turning a more favorable age or have qualified for new discounts, a price reduction is unlikely. Even though you have been a safe driver, your insurance company may raise your rates. “Why are our rates going up?” is one of the most common question and insurance agent or customer service rep hears.
Unfortunately, the best answer is that it’s the cost of doing business. Insurance companies pay out billions of dollars in claims each year. When companies pay out more in claims and expenses than they generate in premiums that prompts insurance companies to raise their rates. This has become especially true in recent years.
More than 40,000 people died on the road last year — up 14 percent since 2014 — the sharpest increase in 53 years. In addition, distraction-related deaths were up almost 9 percent in 2015, according to data from the National Highway Traffic Safety Administration.
“We’re talking about a generation that was texting first, driving second,” Chris Mullen, Director of Technology research at State Farm, told NBC News. “When they get behind the wheel, if they’ve been watching you use the phone, if they would rather use the phone it’s gonna be hard to break that habit and get them driving safely from the get go.”