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Why did my insurance rate go up?

Our goal at Harry Levine Insurance is to make insurance a little less confusing and scary.

Q.  Why did my rate go up?

A.  No, your rate didn’t go up because your insurance company spent too much on office supplies!

Insurance rates are derived by mathematicians (known as actuaries) who look a wide variety of factors.  Whether it’s home, automobile, or business, insurance rates are formulated based on trends observed over time regarding how many claims have happened in a geographic area or demographic group. The more premiums an insurance carrier pays out to help people, the more it must take in to make sure it remains able to pay such claims.

Fraud is one of the leading drivers of high premiums in Florida. Whether it’s staged accidents or unscrupulous legal and medical professionals, Florida insurance rates are much higher than they really should be thanks to extreme abuse of the system.

Urban areas often have higher rates than rural areas because more congestion typically leads to higher numbers accidents/incidents. Each company insures different people, so sometimes one company’s rate of claims is higher or lower than another.

When too many policy holders in a company’s “risk pool” have claims, it requires the company to raise rates to keep up with the demand for claim payments.

Have any more questions, let me know!

About the Author

Jason Levine

Jason received a Masters of Science & Management in Risk Management & Insurance from Florida State University. He has been with Harry Levine Insurance for 9 years and handles the leadership of daily operations. He was the 2013-2014 Florida Association of Insurance Agents Young Agent Council's Agent of the Year. Currently serves on FAIA Board of Directors.

4 comments

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