Why Are Insurance Premiums Increasing?

Insurance companies work by forecasting the cost and probability of an event. The higher the likelihood of a client filing a claim, the more likely the insurance will justify charging higher insurance premiums. Here are some reasons why premiums keep increasing.

Claims history

According to insurers, a history of claims increases the odds that you’ll make another one. For instance, if homeowners start making claims of their policies, there is a likelihood that the insurance policy premium will increase in a short period. This also applies to car insurance. If you make any claims, your premium will increase because you pose a higher risk.

Driving record

Driving records affect your car insurance premiums. It can also affect your health insurance. If you had any violations such as reckless driving and driving while intoxicated or under the influence, insurers consider you a higher risk for auto fatalities.

Area

If you move, you could see an increase in insurance premiums. This is due to different insurance rates in other areas and populations.

Low credit score

Just like lenders evaluate your credit score when estimating your credit score and ability to repay a loan, insurers look at your credit score. They have determined that people with a lower credit score are more likely to get into accidents than those with high ones. Hence your premium keeps increasing due to a low credit score.

Health Insurance Premiums Increase Because:

Patient’s age

Insurance premiums increase with changes in the age bracket.  This is because older persons are at a higher risk of developing an illness or condition that will be costly such as respiratory disease.

Increase of chronic diseases

Chronic diseases are connected to ageing and lifestyle decisions. Therefore, the higher the chance of a client developing chronic diseases, their premium rates will likely increase.

Medical inflation

Medical inflation is the increase in the cost of medical treatments

High rates of treatment

Some doctors and health centres will charge more than others. Hence your insurance premium will increase.

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