Top 10 Reasons Why Auto Premiums Increase
Be in the driver’s seat when it comes to your insurance rates. The top 10 reasons why auto premiums increase might not actually surprise you!
First of all, the specifics of why auto premiums increase aren’t likely unheard of, but even the most basic rules of insurance come into play and really take a toll on rates. Claims, distraction and theft are repeat offenders.
1. Distracted driving overtakes impaired driving.
Distracted driving is the leading cause of accidents and death. In 2018, there were over 23,000 convictions for distracted driving in Alberta. Drive responsibly and even take advantage of My Driving Discount! Both claims and convictions can have an impact on your auto insurance rates, be present and aware of the roads you drive.
2. Safety Does not always mean savings.
Newer vehicles include autonomous capabilities like collision avoidance features, and park assist to keep you and your passengers safe. With these advancements, the use of complex computers and sensors cost more to repair.
The cost of innovation is real, even something simple like a backup camera that many drivers have and use, can add thousands to a “fender bender” and are a big reason why auto premiums increase.
3. Windshields now have built-in technology.
New advanced driver assistance systems make windshields more expensive to replace and may require recalibration of your vehicle’s computer system following windshield replacement. That is on the high tech end, but there are still things like heated windshields, panoramic windshields or even moon roofs to consider.
4. Weather related events are increasing.
The increasing frequency and intensity of weather-related events like hail, flooding, and wildfires are impacting your premiums. In August 2019, a single hail storm caused nearly $50 million in damage to vehicles. Simply, parking in a garage is a great way to avoid hail damage but that may not always be possible.
Take steps with vehicle covers if you live in an area with increased weather patterns. Hail damage may not always be aesthetically pleasing, but really truly consider the impact making a claim on a few bumps can be.
5. Where you live can make an impact.
Trends might indicate where you live is a higher risk for collisions, theft, or other incidents. Do you live in a city, or in rural Alberta? There are different risks based on your location. Stats are big in the insurance industry and they never stop accumulating!
6. Alberta leads in vehicle theft across the country.
Approximately one out of every 250 vehicles were stolen in 2018. Reduce theft by locking your vehicle, keeping personal or enticing items out of sight and parking your vehicle in a safe well lit space to deter thieves.
The 2019 list for the Top 10 Most Stolen Vehicles in Alberta is out now, and as expected, Ford makes up 7 of the top spots.
7. Increasing number of non-minor injuries.
Certainly, Albertans injured in a vehicle accident are claiming for more serious injuries, the average cost per accident has more than doubled since 2005. In 2018, the frequency of bodily injury claims was approximately six claims per 1,000 vehicles. Distracted driving is playing a huge role in this!
8. Increased cost for medical services.
It’s not just physical repairs to your vehicle that are increasing costs. If you are injured you may need additional medical services like physiotherapy or chiropractic to recover. For that reason, people are even further extending hospital stays or enduring life long injuries.
9. Increase in fraudulent claims.
Accidents are being staged resulting in fraudulent claims, and some accident victims are exaggerating the extent of their injury to seek a larger settlement. It almost seems crazy to think that this could or would happen, but some people take advantage of the system and fraud prevention within the insurance industry is at an all–time high!
10. There is no such thing as a little fender bender.
Remember, a collision of any kind may require a bumper replacement, and require recalibration of your vehicle’s computer system. Maintain a safe speed, eliminate tailgating and drive for the conditions present!
Download this infographic and share it with EVERYONE!
The Automobile Insurance Rate Board created a handy resource, that we even have posted up in our office. Above all it’s our job as insurance brokers to set the record straight when it comes to auto rate increases. We are here to help you talk about those tough questions and shed some light on why things are happening.
Top 10 Reasons Why Premiums Increase