No Claims, No Tickets. So Why Did Your Renewal Go Up?
By The NMH Agency Team, Licensed Agent
It’s the phone call our office gets most in renewal season, and it
usually opens with the same sentence: “I haven’t filed a single claim.
Why is my price up 18 percent?”
It’s a fair question, and the honest answer is more useful than the
suspicious one. Your carrier almost certainly isn’t punishing you
personally. But something real is happening, it’s happening across the
industry, and there are concrete things you can do about it. Here’s the
explanation we give on the phone, minus the hold music.
Your premium
isn’t a report card. It’s a forecast.
The mental model most people carry is that a premium is a grade:
behave well, price stays flat. But insurance is priced on what it will
cost to make you whole next year, not on how you behaved last
year. A clean record helps. It’s one of the strongest discounts you
have. But it’s one input into a forecast, and lately the other inputs
have been loud.
Repair and rebuild costs have outrun general
inflation. Construction labor, lumber, roofing materials, and
skilled trades all cost meaningfully more than they did a few years ago,
so the same house costs more to rebuild. That means the same policy is
protecting a bigger number, even though the house didn’t change.
Vehicles are worse: modern bumpers hide sensors, cameras, and radar. A
fender-bender that was once a $900 repair can now be a $3,500
calibration event.
Weather losses are being repriced. Carriers and
their reinsurers (the companies that insure the insurance companies)
have absorbed years of heavy storm, hail, and wildfire losses.
Reinsurance costs get passed straight through to premiums, and not only
in coastal states. If you’ve noticed carriers pulling back or tightening
in certain regions, this is why.
Everyone shares the pool. This is the part nobody
loves hearing: you’re priced partly with your neighbors. More uninsured
drivers, more expensive medical claims, more roof claims in your ZIP
code. All of it seeps into everyone’s renewal, including yours.
The renewal
trap: loyalty is not a pricing strategy
Here’s what matters practically. Carriers know that most people don’t
shop at renewal. They grumble and pay. Some carriers’ pricing explicitly
leans on this, keeping renewal rates higher than the rates they offer
new customers for identical risk. Regulators in several states have
pushed back on the sharpest versions of this practice, but the basic
dynamic remains: the market rewards people who re-shop and quietly
charges the people who don’t.
Our rule of thumb: any renewal increase over roughly 10 percent with
no claims and no coverage change deserves a re-quote. Not because your
carrier is wrong. Sometimes the increase is justified and every
competitor prices you higher. But you can’t know that without
looking.
What actually
moves your price (and what doesn’t)
When people try to fight an increase on their own, they tend to reach
for the wrong levers. Cutting liability limits or dropping uninsured
motorist coverage saves a little now and can cost catastrophically
later; it’s almost never the right move. Here’s what tends to work
instead.
Re-shopping the market. The single most effective
lever, full stop. Carrier appetites shift constantly. A company that
priced your profile badly two years ago may want exactly your kind of
risk this year. This is what independent agencies are for: we re-run
your profile across 50+ carriers, and you keep your agent even when the
carrier changes.
Raising deductibles deliberately. Going from a $500
to a $1,000 or $2,500 deductible cuts premium meaningfully, if
you have the savings to cover it. This is trading small-claim protection
you probably shouldn’t use anyway (small claims can raise your rate) for
a lower ongoing cost.
Asking about every discount, again. Discounts
change. Paid-in-full, autopay, paperless, new roof, monitored alarm, low
annual mileage, telematics programs for good drivers. The list your
carrier applies today isn’t necessarily the list available. An annual
discount review takes five minutes.
Fixing the small stuff that follows you. Lapses in
coverage, even brief ones, are expensive. So is letting a teen driver go
unrated on the wrong vehicle. If your household changed this year, tell
your agent before renewal, not after.
Bundling, but verified rather than assumed.
Multi-policy discounts are real, but as we’ve written elsewhere, the
bundle should win on math, not on marketing. Quote it both ways.
When the
increase is telling you something bigger
Occasionally a renewal spike isn’t noise. It’s a signal that your
carrier is repositioning away from your region or property type. If your
increase is dramatically out of line with the market, or arrives
alongside a nonrenewal notice for neighbors, it’s worth a conversation
about carriers with genuine long-term appetite for your area. Riding out
repeated 20 percent increases with a carrier that wants out of your
state is a losing game. There’s usually a better-matched market, and
finding it is exactly the kind of unglamorous work we do all day.
The takeaway: a rising renewal with a clean record isn’t an
accusation, and it isn’t immovable. It’s the market talking. The
households that answer, with an annual re-shop and a deliberate look at
their coverage, consistently pay less over time than the ones that just
keep paying.
Renewal came in high? Send it to us before you pay it. Call
800.388.6780 or request a re-quote. Ten
minutes, 50+ carriers, no obligation.