Another Car Insurance Premium Rate Increase?

A: Every time my car insurance policy renews it seems like it goes up and when I call and ask why I am told that the company has had a premium rate increase. Why do they need to keep having rate increases?

Q: Just like with any other business, increasing the price of a product is done to keep a company in business. In insurance, they may have to raise your premium because the wages in your state increased, which increased their cost to do business.  They could also need to increase your rate because there was a disaster where they paid out a large amount on claims that were filed in your area. A rate increase could also happen because an insurance company wasn’t charging enough for insurance coverage to cover the number of claims that were filed over the course of the year. There are any number of reasons for why an insurance company has rate increases.

Insurance companies, however, are not allowed to just increase your premium at random though. Every car insurance premium rate increase you may see has to be approved by the state you live in.