Why Did My Car Insurance Rise Even When I had No Claims?
If you have the luxury to own a car, it is mandatory to buy car insurance in UAE. Car insurance is done to protect your car against losses that might occur due to some unavoidable incidents. The price of your car insurances may vary from time to time. It is really frustrating to see the price of your insurance go up while renewal even when you had no car insurance claims and have been a cautious driver all along. But then what is the reason behind this hike in the insurance prices?
You might think that the changes in the rates are dependent upon your risk factors being a driver but there are a lot more factors responsible for the hike in the rates. There are in fact two sets of factors responsible for the same- factors that might be in your control and factors that are beyond your control.
Let us first enlist the set of factors that affect the rate of your car insurance on the basis of the things that within your control or are related to your situation.
1. Driver’s History
The history of your driving records and your claims and your history of driving violations and convictions, if any, which may lead to surcharges can lead your car insurance to go up.
2. Geographical Factors
The rates of auto insurance may vary from one state to another. There are various reasons behind this disparity in the rates which include crime rate, population, or simply higher rate of claims in that area.
3. Removal of a Vehicle
There is a possibility that you might get discounts if you get more than one car insured when you buy car insurance in UAE. If the second car is removed, then the insurance price on the first car may rise.
4. Increase in Medical Costs
If the number of cars on the roads has increased, then the risk of more accidents also increases. Due to this, the quantity of the amount paid by the insurance company per claim increases. In such situations, increasing medical costs is the reason why insurance prices go up.
5. New Drivers
Another reason for a hike in the insurance rates is the addition of new drivers or change in existing primary drivers of different vehicles on the policy.
6. Employment Change
Due to a shift in employment, you might end up losing a professional discount or a group discount which might lead to a hike in the insurance prices. The change in the distance to work due to this shift may also be a reason.
7. Multiple Policies
In case you hold more than one policy with the same insurance company and end up canceling one or more out of them, you might lose the discount that was offered to you for having more than one policy with the company.
8. Change in the Payment Plan
Sometimes the insurance companies may change your payment plan structure which you might have failed to notice. While you buy car insurance in UAE, make sure you choose the plan which gives you the best car insurance claims and suits your needs. The changes in the payment plan may impact your insurance cost.
There might also be cases where the insurance company might have made human or computer errors, due to which, you might be given a list of rates that are not correct. If you happen to encounter any such situation of doubt, contact your representatives and review the factor.
10. Credit Score
The insurance company also considers credit-worthiness while considering the insurance rates. A low or poor credit rate might lead to high insurance prices.
The next set of factors includes those which are beyond your control. These factors are related to your car and the insurance company.
11. General Liability Rates
The liability claims that the insurance company pays for all the clients they have insured might affect the general liability rates. If during the previous years, the amount they have been paying on car insurance claims and defense costs has increased then there might be some rate adjustments from the end of the insurance company. These changes are not in your control.
12. Vandalism, collision or Rising Claims in Your Area
There can be changes in the pattern of traffic or weather, or the location might get more congested with time, or any other such factors may lead to an increase in the claims. As soon as the insurance company notices such changes in the area, they tend to change the rates accordingly.
13. Car Theft
If there is an increase in the rate of car thefts in your area or state, or in case of your car, in particular, may also cause a rise in the insurance rates. One way to know if the theft is related to the car you have is by asking your agent that the whether the rate group of your vehicle has increased since the previous year and takes their suggestions in the matter. In case the issue is for your car then you can think of adding things like vehicle engraving, anti-theft devices or get discounts to balance the hike in the rate. Both new and old cars are impacted by car theft. Insurance company take note of the annual report on top stolen vehicles, compare it to the losses they had to face or claims they had to pay on those cars.
Over to You
Even after considering all the above factors, nobody wishes to pay more than they can afford. So you can take measures like raising the deductible, taking up liability instead of full coverage when possible or switching car insurance company to the one with lower costs to save on your car insurance.