Buying an auto insurance policy is never a tedious task but when there is a renewal of auto insurance, then at times buyers end up paying a higher premium. Although the buyer has no choice but to pay up the renewal amount but many times a buyer is left with one single unanswered question.
What made the premium to go up? Even though I had not made a single claim in the past year.
There are two major reasons why the premium goes up in any auto insurance renewals
- Due to the action(s) of a policyholder, despite the fact that in the past there was not a single claim made by the policyholder.
- Due to external factors which are not under the direct control of the buyer.
Reasons for change in premium directly related to a buyer’s actions
- Violations of driving rules and regulations may increase the premium. In the past, if there has been any grave traffic rules violation or any serious offence carried out by the holder, then the insurer may increase the premium
- Change of address, where the new place of residence could be a costly area with respect to insurance i.e. If a buyer has moved to a metro city from a tier-II city then this shifting could also increase the renewal premium for the buyer
- Addition of new drivers or modification of existing primary drivers in the policy documents
- Cancellation of other policy(-ies) from the same insurer may impact your vehicle insurance
- Removal of vehicle(s) from the policy, having multiple vehicles in it, may also increase the premium value for the buyer
- Renewal of insurance from a new vendor may also increase the premium for insured as every insurer sees the risks differently and therefore may underwrite the risks accordingly by varying the premium for the perceived risks.
Change in premium due to external reasons
- Increase in Liability claims – When the total claims made by policyholders in any year exceeds the premium collected by the company then in the upcoming years, the insurance company increases the premium amount for future policy issuance and renewals
- Increase in accidents, theft, riot prone region etc in any specific region may increase premium for vehicle insurance
Before buying a new policy or renewal of auto policy, buyer should lookout for insurers which charge low premium and usually don’t burden their buyer with unnecessary renewal premium. Bharti AXA GI is such one insurer which controls the renewal premium for the buyer. It also enables customers to avail a no-claim bonus up to 50%.