This is a mystery to many business owners and consumers wonder often at renewal. These are not insurance companies are greedy or simply change for no reason, there are two very common reasons behind it:
1) The value of the property you make has increased. Because the replacement cost of buildings and goods rises each year due to inflation, many insurers apply an automatic increase of the insured limit so that the policyholder will not have to worry about fit themselves. This increase is linked to the CPI index, usually with additional weighting on construction and consumer goods segments (which are what most impact of a disaster). Although the insurance rate has not changed (the premium per $ 100 guaranteed), the fact that there are higher limits would lead to higher premiums.
In certain types of insurance such as Auto, you can see the hand at work. As your vehicle ages, it depreciates and thus worth less. Thus, if you write off the insurance company will not have to pay as much, so you will usually see a gradual decrease in the collision and comprehensive parts Auto premium year. Of course, this assumes that there are no other things that change, such convictions or traffic accidents responsibility.
2) Insurance is a way of sharing risk among the insured. The premiums are pooled and losses paid out of the pool. If other policyholders like you to know the high demands, then it is more likely that you'll also have a claim in the future. A common example is to hail in the Calgary area. Although the house everyone was hit, many have been in recent years, well above the historical average. This leads most to conclude that we are experiencing a higher rate of hailstorms than in the past (almost $ 3 billion over the last five years alone!), Rates and deductibles now increased to compensate. It is only a matter of time before another hail storm hit the area, and insurers are trying to best prepare for the next. "
Keep in mind that there are ways to reduce your premiums by changing your insurance coverage. To learn more about your options, speak with an independent broker
Blog Author :. Kevin Lea | Commercial Account Executive | Rogers Insurance Ltd.
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