Auto Insurance Rate Changes

You purchase insurance to protect yourself and your family in the event of an unexpected loss, and to provide financial protection if you are found responsible for an accident or injury. But you haven’t had an accident, or even a ticket. And yet your rate increased. Why?

There are a number of reasons why your rate may have changed. While a good driving record is always a great thing to have, other factors in addition to a clean driving record are factored into how your rate is determined, and some of these factors may not be directly related to your driving.


Inflation can lead to higher insurance costs. As vehicles become more technologically advanced and expensive to manufacture and repair, as medical costs increase, it can cost more to pay for a loss this year than it would the previous year. Insurance premiums reflect those additional costs, as the insurance industry is directly linked to other industries.

Medical Costs
Part of the cost of your auto insurance covers medical care for you and/or those you may injure in an accident. As the cost of health care continues to increase, the cost of auto insurance also goes up in order to be able to continue to pay for medical care, and to provide the insurer with sufficient premiums to pay claims.

Despite the best efforts of insurance companies to identify and prevent insurance fraud, insurance fraud is another factor that can affect insurance rates. These false claims cost insurers billions of dollars each year and can contribute to increased rates for everyone.

Changes in state laws
Occasionally a state’s legislature will modify their minimum coverage requirements, which means you may have to purchase more coverage and can result in a higher premium.

It’s not always about low cost insurance
As you can see, the amount you will pay for coverage is dependent on a number of variables. Everyone wants to save on insurance, but the cheapest option isn’t always the best choice. You need to consider your level of risk as well as the assets you need to protect. Saving on auto insurance is great, but you also want to select the right coverage, so a situation does not arise where your coverage does not provide the necessary protection.

A Farmers Friendly Review may be able to help
Talk with your Farmers agent to see if there are additional ways you can save on coverage. A Farmers Friendly Review can help identify discount opportunities and any potential gaps in coverage. Even if your insurance rates increase, you may find some discounts to compensate for the increase. An annual Farmers Friendly Review is a great way for you to stay on top of your coverage.