Car Insurance Rate Hikes Not Uncommon This Year
Many consumers have opened letters from their car
insurance company this year and been disappointed to learn that their premiums
are going up. Sometimes by a lot.
Lynette of Boca Raton, Fla., said she and her husband
have been insured with The Hartford, through AARP, for years.
“Many years with company never a late payment. Never a
claim, no tickets, no accidents, clean driving record, no arrests,” Lynette
wrote in a ConsumerAffairs post. “And a $600.00 increase! Their commercial says
will never drop you for any reason. But they sure know how to force you out!”
Before Lynette changes insurance companies she should
call The Hartford. She is entitled to ask why her rate went up, especially by
so much. It's possible that it's a error that could be corrected. It never
hurts to ask.
Just because Lynette and her husband are good drivers and
haven't submitted a claim doesn't mean their rate can't go up. Insurance is a
shared risk, and if claims have jumped in Lynette's geographic area, all
policyholders might be hit by a rate increase. And according to one insurance
professional, that could well be one explanation.
“I know you don’t want to hear this, but 2012 is going to
be a tough year for your premium,” Keith Verisario, Vice-President of
Chicago-area All-Security Insurance, writes in his blog. In 2011 insurance
companies paid $1.16 for every $1.00 collected. They paid over $100 billion in
worldwide losses. In the U.S. they paid $36 billion in losses. In 2010 it was
about $18 billion -- that is a lot of negative profit, or in other words,
insurance companies lost a lot of money.”
Verisario suggests consumers faced with a big rate hike
contact an independent insurance agent that can offer quotes from multiple A to
A++ rated carriers. Another way to get a lower rate is to bundle your
homeowners and auto policies with the same carrier.
In Lynette's case, she should definitely follow up with
The Hartford to learn the reason for her rate hike and to make sure it isn't a
mistake. Sometimes rates can be affected by a change in your credit score. By
following up with the company she can make sure there isn't adverse information
in her credit report that she doesn't know about.
Another Florida consumer -- Patricia, of Merritt Island
-- provides hope.
“AARP/Hartford raised my car insurance from $604.00 to
$732.00 and they told me that the State of Florida allowed them to do so,”
Patricia wrote to ConsumerAffairs. “I cancelled my policy and got new insurance
for less than $300.00 a year.”
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