I realize that insurance rates are computed based on a number of factors and it's therefore impossible to make extremely general statements about them that apply to everyone, but I just received my auto insurance renewal information in the mail today, and Amica is jacking my yearly premium up by 12%, despite me not filing any claims, receiving any tickets, etc. during the previous year.

I spoke with a CSR and she confirmed that there was no negative information on my record that would have led to the increased rate (i.e. a ticket or claim), but couldn't give me any more information as to why my premium was increasing so much. I haven't moved since I first bought the policy last year, and I'm not aware of any recent spikes in crime in the area.

I went with Farmers Insurance the previous year, and they did the same thing to me when my policy came up for renewal, which is why I switched to Amica.

For some reason, I was under the impression that your rates wouldn't really change much if you didn't file any claims, get any tickets, etc. An increase of 12% seems excessive, but then this is only the third time I've ever shopped for car insurance.

Is this experience normal? Is it pretty much expected that even drivers with perfect records will have to shop around every year to keep from getting screwed on rates?

I would also add that they increased my renter's insurance premium by 15% relative to the previous year, again without any claims, although I did notice the following information in my new renter's insurance policy booklet:

"Based on information in consumer reports, including a credit-based insurance score, you are not receiving our lowest premium."

"Items that affected your insurance score are: Unfavorable percentage of recently opened revolving accounts to all revolving accounts or no revolving accounts; Insufficient length of time since most recent account established".

Granted that could explain the increase in the renter's insurance premium, but that information didn't appear in the booklet containing my auto insurance policy, so I would assume it wasn't an issue there. The CSR agreed with me on this.

I pulled a free copy of my Equifax report that Amica used and didn't see any negative information on there. All accounts were in good standing, no late payments, etc. My most recent account was a Dell DPA opened in February, but if opening that one card is enough to cause such large increases in my insurance premiums, then I'm not sure what else to say. I always pay all my cards in full each month and the Dell DPA even had a $0 balance when they checked my credit report.

Has anyone here been with the same insurance company for a long time, not filed any (or many) claims, and not seen such large increases in their yearly premiums? Has anyone else received the messages I posted above about the credit-related factors that apparently affected my renter's insurance premium?

Insurers raise their rates to compensate for general inflation and poor experience. 12% is not that unusual. You can shop around to try to get a lower rate.

rzyzzy said:FWIW, the credit report your insurance company uses isn't the same as the one they send you.Yes it is. They just don't use the standard FICO score the people are used to seeing.

12% hike is quite significant, considering you have not made any claimes in last 1 year. I think it is typical bait and switch game from Amica. They lured you first and now want to charge you more to recoup their cost in year-1. Check with Geico. In my experiecne for the last 4 year, they consistently lowered my rate every year.

My homeowners went up 50% because of a "rate increase" even though I had claim gaurd (protects against claims).. what a crock, though I cant really complain as it is still less than the 5 I compared it too, and they paid out 10k for a claim in 2008, so I guess I really cant complain.

My auto and homeowners went up this year as well. Auto no claims, tix, etc and roughly the same rate of 12%. I price shopped and it was still the best for me.. but now it's a very close race and last year it wasn't.

That's just how it works with insurance, big hikes are to be expected in this wacky industry.

This what I learned as well, insurance is a shared risk. If they have fewer claims from your 'area' then you are good. if not, the increase rates to compensate for the extra expenses they incurred.

AAA reduced my rental insurance by 9% when they just sent the renewal notice. This is the first time ever I see it reduced.

mt2va said:I'm assuming auto insurance rates are set somewhat like health insurance premium rates (I work in health insurance) & the thing is its not how many claims or how much you used services but how much the other people did. They look at a pool of people together & based on previous claims experience & future expected expenses they have to set a rate to cover the expenses, overhead costs, & if they are for profit company a profit.

BetterInfo said:This what I learned as well, insurance is a shared risk. If they have fewer claims from your 'area' then you are good. if not, the increase rates to compensate for the extra expenses they incurred.

AAA reduced my rental insurance by 9% when they just sent the renewal notice. This is the first time ever I see it reduced.

mt2va said:I'm assuming auto insurance rates are set somewhat like health insurance premium rates (I work in health insurance) & the thing is its not how many claims or how much you used services but how much the other people did. They look at a pool of people together & based on previous claims experience & future expected expenses they have to set a rate to cover the expenses, overhead costs, & if they are for profit company a profit.
I moved from All State to AAA this month. All state consistently increased my rates while my cars kept depreciating. After 6 years with them, i decided to move to AAA which has a better JD Powers rating and lower rates... I wonder if the rate increase seen lately is because of more insurance fraud due to recession or because they are losing customers as more people live w/o insurance.

SUCKISSTAPLES said:One would think so, but ameriprise and allstate definitely have increase persistent customers, while offering the exact same people lower quotes if they approached as a new customer.With so many carriers, anything is possible. But I think the majority of people complaining about renewal prices have simply seen general increases that equally affect new customers.In the case of allstate, it was particularly bad- someone who had stayed with the for 5-10 years could often get the same coverage for 50% less as a new customer

all sorts of excuses wre given , such as new customers are rated on credit etc , while peristent ones were in a different group, but i think we all know the real reason was to screw those customers too lazy to shop and move to another carrierThat makes sense. Each state's regulators have different requirements, but I have seen large carriers like Allstate segment their business and start writing new business under a different rate structure than renewal customers. That can lead to different rates.

My earlier statement about renewal customers rarely being increased was referring to a particular segment that would determine rates with transfer and renewal discounts. New business often qualifies for transfer discounts, for transferring from another insurer. Renewal business often qualifies for renewal discounts. I have not seen a renewal discount that is smaller than a transfer discount, thus leading to a rate increase.

OP you don't say what type of car insurance you .. its going up more than 10% due to the depreciation of the vehicles and not costing as much to repair / pay out book value on if (you have full coverage). I think the recommended thought on FW is compare rates every couple of years to keep the insurance companies from jacking up the rates as compared to what else you can get...

Also just thought, where in your policy did it go up 12% .. every category or just in collision or bodily injury ? More info please .....