Why Does My Insurance Company Rasie Its Rates for No Reason?

June 1, 2018

Doesn't the Government Regulate Them?

Let’s take these questions in reverse order.

Doesn’t the government regulate them [car insurance companies]?

Yes. In the US, insurance companies are regulated by the insurance department of your state of residence. Your state insurance department’s purpose is to protect the consumer from abuse by insurance carriers. One of those responsibilities includes the review of rates each insurance company must “file” with the respective states in which they do business. You can find your state’s insurance department using the National Association of Insurance Commissioners (NAIC) Map here.

Why Does My Insurance Company Rasie Its Rates for No Reason?

Oversight and state regulation prevents insurance companies from raising rates without demonstrating corresponding reasonableness for the risks they insure. The Ohio Department of Insurance website outlines from a high level what is each regulatory body’s primary objective in their oversight:

“When the Department analyzes risk calculations and rating plans, we determine whether or not the calculations and plans are “actuarially sound”, i.e. reasonable in light of the anticipated risks and calculated based on the correct formulas or actuarial standards.”

The process for auto insurance rate filings is different for each state. Some states have very strict oversight and controls related to rating plans, while others are a bit more relaxed. Broad types of rating laws that states use include:

Prior Approval
Flex-rating
File-and-Use
Use-and-File

For those interested, (though dated 2010) the NAIC’s white paper “Analysis of Property/Casualty Insurance Rate Regulatory Laws” outlines the contrasting approaches for each state’s review of auto insurance rating plans. A couple of interesting pull quotes from that document: [1]

“Indeed, the nation’s insurance rate regulatory framework is trending toward greater rate modernization and away from more rigid and restrictive supervision. Even New Jersey, which is still a prior approval state, passed significant auto insurance reform in 2003.3 The National Conference of Insurance Legislators and American Legislative Exchange Council, both comprising insurance lawmakers throughout the country, have also adopted property casualty model laws designed to eliminate prior approval systems; they advocate open competition instead.”

“Experience in certain states (e.g., Massachusetts, New Jersey and Florida) shows that rigid market and price controls have had detrimental effects on the public. In contrast, two benefits resulting from some states’ move to greater rate competition are: (1) an increased number of insurers, offering consumers more choice in companies and products; and (2) the ability for insurers to better price their products, creating cost savings in the form of lower rate increases or even rate decreases. “

Auto insurance is an open, competitive business. That fact alone appears to offer benefits to the consumer. One might be inclined to interpret all this as car insurance rates at the compan’s “leisure”. Regardless what you call it, that may not be a bad thing for the consumer. Don’t like the auto rate or plan you’ve got? Please feel welcome to give us a call - We LOVE to Help! ____________________________________________________________ Originally posted at Quora.com https://www.quora.com/Why-do-car-insurance-companies-raise-their-premiums-at-their-leisure-Doesn-t-t... Footnotes: https://www.leg.state.nv.us/Session/76th2011/Exhibits/Assembly/CMC/ACMC279L.pdf

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Auto Rates and Finger Prints: Both are Unique to You!

By Jeff Ryan • April 7, 2026

Factors You Can’t Easily Control These factors are built into your profile, but still play a major role: Your location: Claim trends, traffic, and weather patterns where you principally drive. Your age and driving experience: Especially for younger drivers. Other drivers in your household: Their age and driving history. The vehicle you own: Unique to the Year, Make, Model, and Sub-model’s damageability and cost of parts/labor. These factors significantly influence price differences, but they don’t tell the whole story. Factors You Can Control This is where habits and wise decisions can make a real difference: Your driving habits: Minimizing tickets and accidents can have a direct impact. Your coverage choices: Liability limits, deductibles, and optional coverages can vary widely. Your insurance consistency: Avoiding lapses in coverage. Your annual mileage: How much and how often you drive. Discount opportunities: Bundling, pay-in-full, NYS defensive driving course. Your Insurance Score (Yes—You Can Influence It) Insurance companies use a credit-based insurance score as part of their rating process. While it’s based on financial behaviors, it is not permanent—and it can be improved over time. Simple habits like: Paying bills on time Reducing outstanding debt Avoiding excessive credit inquiries… can positively impact your score—and in turn, your insurance rates. Your insurance score is under your control and a worthy mid to long-term project in and of itself. For more information on what you can do to positively influence your score, see: Great 8 Tip #8 - What's Credit Got to Do with Insurance? How Can I Improve My Auto Insurance Score Why Comparing Rates Doesn’t Work When someone says, “I only pay…” , the uniqueness of their fingerprint is missing. What are their: Deductibles Driving history Insurance score Household profile Coverage limits: what they may be giving up in terms of protection. Price without context can be misleading and discouraging.