Auto Insurance Rate Increases

Many people believe that if they just drive defensively, not get into accidents, not make claims against their car insurance that eventually their rates will go down. However, this is not really normally the case for most people. In fact, rates will continue to go up for most, depending on where you live and who your auto insurance company is.

For example, you could live in a zip code that they consider a fairly safe zip code, and then things get rezoned, or things change in your zip code. The auto insurance companies have started looking at these zip codes to see the number of auto accidents in them, or the number of speeding tickets, etc. to determine the premium that you should pay.

They will then base your car insurance premium on what the other drivers are doing in your zip code and charge you accordingly. They say that this ensures that when you get into an accident, presumably in your zip code, that there will be ample premiums to cover the losses. However, many feel that this is just one more way for auto insurance companies to keep filling their coffers with more excesses.

They call it “changed residential territory” but most insureds call it profit for the car insurance company. After all, if you have been a safe driver, even if you have never been in an accident, and your premium keeps going up – you are either paying for another driver who will go get into an accident at some point and make a claim against the insurance company, or the auto insurance company is just simply giving themselves a bigger piece of the pie.

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