A rise in your premium cost for your insurance can be frustrating especially if you have not filed a claim. But know that insurance premiums are not raised on a whim and the reason for a rate increase is almost always tied to insurance risk.

While most of the factors are manageable, there are occasions when your rate could increase or even decrease for reasons beyond your control.

The following are the most likely reasons why your premium may go up unexpectedly;

1) Past claims history

History or past claims increases the odds that you will make another one. While this may or may not be fair, it is one of the measures probabilities.

2) Zip code (change of location)

When moving to a different location you may see some claim changes. This is because the premiums and claims probability are also tied to your location. Some areas are more insecure compared to others e.g. over populated areas

3) Change in discounts

Qualifying for discounts can help you save significantly. However, it is possible to no longer be eligible for the discount at the time of your policy renewal e.g adverse claims experience.

4) Age

This affects majorly motor insurance. The rate on teenagers and seniors tend to be high.

This is because of the likelihood of getting into accident at certain age due to anxiety.

5) Accidents and violations in your area

Location is significant when determining the insurance premiums e.g living an area with high rate of accidents and violence can increase your chances of being in an accident and lead to more expensive insurance.

6) Car modifications

Car modifications such as;

• remapping your engine
• putting a new spoiler
• new tow bar can affect the cost of your car insurance

Car modifications make cars more attractive to thieves, which increases their chances of being stolen. Other modifications might increase the speed and power of a car, which puts you at more risk of being involved in an accident.

7) Policy extensions

It is insurance coverage that goes beyond what a standard policy offers. Typically it is purchased separately from a standard policy and function as an extension of the primary coverage .It often covers perils unlikely to occur e.g. political violence, flooding, bushfire.

8) Change in tariffs

This may affect the premiums a policy holder pays on an insurance policy.

When there are adverse losses on particular classes of insurance, the reinsurance rates tend to revise the tariff upwards hence increase in premium.

This mostly affects motor business and to some extent fire policies.

In conclusion different factors determine insurance value. In some cases you may end up with lower premiums. For instance, adults or women tend to pay lower premiums for motor policies than teenagers. Being eligible for discounts can also decrease your insurance costs.