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by Indiana Farm Bureau Insurance

Why does my insurance premium change?

Husband and wife using laptop - checking the premium change on insurance policy


Insurance is simply one of life’s necessities - even if none of us particularly enjoy spending our hard earned money on insurance premiums. However, if you ever do experience a loss, you’ll be glad you made those payments which provide coverage and protection when you need it most.


Still, it can be confusing when your insurance premium changes. While circumstances vary with each policy and insurance company, a higher insurance premium can occur for a variety of reasons. Insurance companies have formulas to better match the premium amount you pay to your risk of future insurance claims. We’ve got the inside story on a variety, but not all, of the potential factors contributing to premium increases throughout the insurance industry.


  1. At-fault accident or traffic violations.  If you’ve been involved in an accident or received a ticket, your premiums may be affected. Abiding by traffic laws reduces your chances of being involved in an accident or receiving a citation.

  2. Location, location, location. Depending on where you live, that location could affect your premium. As an insurance company, we monitor the frequency and severity of claims in all areas, and may charge higher premiums in the areas with a higher amount of losses. For example, information such as crime rates has an impact on insurance premiums.  

  3. Uninsured drivers. Companies evaluate the claims involving uninsured or underinsured drivers over time. Therefore, the changes in the number of uninsured and underinsured drivers may also impact overall insurance premiums.

  4. Distracted drivers. Accidents involving distracted drivers tend to be more serious and severe than your classic fender bender. As a result, insurance companies have to pay out increased amounts in claims; therefore, affecting the rates they charge.

  5. Cost of car repairs. As technology continues to advance and become more sophisticated within vehicles, the cost to repair those vehicles increases.

  6. Medical costs.  Insurance companies factor in rising medical costs in order to ensure premiums rates are appropriate.

  7. Age of the driver. Usually premiums are more expensive among teenage drivers and decrease  as drivers age. Then, as drivers get older, senior-aged drivers may experience increased premiums once again.

  8. Changes to your policy. Your premium can also change if there have been changes to your policy, such as adding or removing discounts or changing the insured drivers. Sometimes premium changes result from other policy changes you make, such as adding or removing coverages/limits/deductibles. These are typical customer-initiated changes that may result in a change in premium.


If you still find yourself questioning why your insurance premiums may change over time, contact an agent to go over your policies with you and see if you qualify for discounts. There are many discounts available to Indiana Farm Bureau Insurance clients. If you are unsure where to begin, reach out to an agent for guidance.


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