The frequency and severity of accidents are on the rise — and so are all of the associated costs! Multiple factors go into determining insurance rates, including many that you may never have considered.
Top 10 Reasons Why Your Insurance Rates Might Rise
1. Accident benefits : More accidents in Alberta are resulting in serious injury claims. Some of these claims require increased costs. In such cases, we pay for support services, such as physiotherapy and chiropractic services, to assist the victims in their recovery.
2. Legal costs: Lawyers are being used more often to litigate claims, resulting in higher legal fees. These fees create added costs for each of the parties involved, including their insurance companies.
3. Extreme weather: The increasing frequency and intensity of weather-related events like hail, flooding and wildfire also impact your premiums. In August 2019, a single hailstorm caused nearly $50 million in damage to vehicles.
4. Distracted driving: Distracted driving is the leading cause of accidents and death. In 2018, there were over 23,000 convictions for distracted driving in Alberta. Safe driving habits and keeping your eyes on the road (and off the screen) are the best ways to reduce driver error.
5. Vehicle theft: Insurance fraud is on the rise. Approximately one out of every 250 vehicles were stolen in 2018. Reduce theft by locking your vehicle at all times.
6. Location: Trends might indicate that where you live has a higher risk for collisions, theft, or other incidents. Do you live in a city or in rural Alberta? There are different risks based on your location.
7. Vehicle repair costs: The cost of vehicle repairs continues to rise. The cost to replace luxury features, like parking-assist or safety features like collision avoidance or rear-view cameras, can make a simple fender-bender very expensive. These “small” accidents can require just a bumper replacement or the re-calibration of your vehicle’s whole computer and sensor system, which drastically increases the cost to get you back on the road.
8. Your driving record: Insurance companies use your driving record to determine how much of a risk you pose on the road. Generally, the better your record, the lower your insurance premiums will be. When looking at your driving record, insurers consider the number of drivers, the number of years you’ve been licensed for, whether you have any convictions due to driving infractions or speeding tickets and the number of accidents you’ve had.
9. Windshields now have built-in technology: New advanced driver assistance systems make windshields more expensive to replace as well. You may also require re-calibration of your vehicle’s computer system following windshield replacement.
10. Increasing fraudulent claims: Accidents are being staged more often, resulting in fraudulent claims. Some accident victims also exaggerate the extent of their injury to seek a larger settlement. Fraud hurts everyone.