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Understanding Insurance

Help Prevent Your Auto Rate from Rising

Did you notice an increase in your car insurance premium but you’re not sure why it went up? We get it — it can be frustrating not knowing why your insurance rate increases — but we’re here to help you better understand how an auto insurance premium is determined so you know what it takes to prevent your rate from going up come renewal time.

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    On screen: Animation of a vehicle on a residential road with houses in the background, transitioning to an animation detailing the fundamentals of insurance using stacks of money in a container.

    Narrator: Wondering how home and auto insurance works? Well it all starts with your premium.

    When you pay your premium, it goes into a bucket of money that holds the premium of everyone who is insured by the insurance company. So, when a customer needs to file a claim, your insurance company will use the funds in the bucket to help cover costs for things like auto and home repairs.

    And when there are lots of claims, you might see an increase in your premium because the insurance company needs to cover all of the claims being filed.

    Looking for ways to save on your insurance? Consider bundling your auto and home insurance together, paying your bill in full and taking advantage of the available discounts.

    At American Family Insurance, we do our best to keep insurance costs low while still providing dependable coverage and excellent service.

    Connect with an agent to get the protection and support you need.

Why Your Rate Rises and What You Can Do

There are a number of reasons why your insurance rate might increase, and while you can’t control all the factors that determine your rate, here are some mindful actions you can take to keep your rate down:

Stay claim-free. If you file a claim for an at-fault accident, your insurance company could consider you a higher risk and your rate most likely will go up. How much your premium goes up depends on the severity of the accident, as well as other specificities on your policy.

Watch your speed. If you’ve ever gotten a speeding ticket, you’re probably already aware that the consequences don’t end as soon as you pay up. That’s right, a speeding ticket can increase your premium significantly (especially multiple tickets). Stay out of trouble and you can avoid that rate increase.

Don’t be late! We all forget to make a payment every now and then, but when it happens, your insurance company probably isn’t going to like it. Typically, you’ll get a reminder and a warning before your rate will increase, but if paying late becomes a habit, you’ll see a noticeable increase in your rate.

Good thing American Family Insurance makes it easy to avoid late payments when you enroll in autopay — you can even get a discount for signing up!

Moving? That’ll do it. Are you moving to a bigger city? Your rate could increase because you live in an area where more drivers are on the road. More drivers equal more chances of an accident— your insurance company is going to consider that a higher risk.

And, if you move to a neighborhood with a high crime rate, your insurance company could consider you a higher risk, and that could impact your rate.

Getting a new job, increasing your annual driving mileage and even your credit score can all also affect your insurance rate. But now that you know some of the different factors that determine your premium, you can take control and avoid some serious surges in price.

Lowering Your Car Insurance Rate

Remember — having insurance is a good thing and it’s meant to give you peace of mind. And since no one enjoys paying more money than necessary (especially when it comes to insurance), we’ve highlighted some ways for you to proactively lower your car insurance premium. From bundling your home and auto to having safety features in your vehicle, you’re bound to find a number of ways you can take control of your rate.

Connect with an American Family Insurance agent who will help you build a policy with coverage and discounts customized to you — it’s our way of helping you protect what matters most.

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Related Topics: Insurance Needs , Discounts