Premiums are set at a given date for a specified period. And they are based on the current information available to the company. They are technically designed to be changed. These days, many companies are offering six monthly policies instead of a yearly one so that they can make the necessary alterations more often. This applies to both policyholders and insurers. They can have a look at their options and renegotiate a new package to move forward. Renewals also give the policyholder a chance to make adjustments to the coverage.
Nonetheless, they are unlikely to change a lot at each renewal providing everything else remain the same. If anything they should go down if you have not made any claim or had other adverse incidents. This is a relief when you have an accident of auto theft on your record. Initially you may see large increase in the premium. But the rates start coming down as early as from your next renewal.
We should look at the changes that are happening in two separate times. They should be classified as changes during the policy period and changes at the renewal. We have already covered a bit about the renewal and premium changes at the time.
There are cases that forces companies to re-adjust their prices while the policy still in force. Generally, discovering a new information is the main reason for making adjustments. The carrier must have a reason to increase your rates once you bought the policy. A mistake at some stage may be offered as an explanation as well. For example, your broker may have made a mistake while calculating your premium.
However, you are allowed to make changes to the policies while they are in affect. Life doesn’t stay still and you move, change your auto, job or want to add another driver. All these changes will require adjustments, additional premium or refunds. This is considered part of the business and dealt with everyday.
It may be more useful to talk about the premium changes at the end of your policy term. There are a few factors that can affect the change. When a company increases the rates they will have to tell their customers. Actually, they may not tell you but they will have to give you an explanation if you ever ask. This could be a good starting point to deal with a premium hike. Once you know the reason you can deal with it more efficiently. Also, you can clear any mistakes or misunderstandings with your current provider or broker.
There is no need to panic at all as most companies give you plenty notice. At least they should let you know the renewal terms couple of weeks before the due date. This is plenty time to look at alternative providers and see if you can find affordable replacement policy. This can even work out better for some motorists who finally do something about expensive costs. They may be able to discover a lot better deals as a result of their searches.