The Factors Behind Your Increased Commercial Insurance Rates

Paying attention to your new commercial insurance rates during the renewal period is an essential way to make sure your company is receiving affordable coverage for managing financial losses. But this is also a time when you may have many questions about changes in your policy. Seeing your commercial insurance rates go up isn’t fun, but there are typically good reasons for the increases. Knowing why rates increase and what you can do to keep your costs lower makes it easier to understand your new commercial insurance policy.

Changes in Your Business

One of the biggest factors that influence insurance rates is the business type. Naturally, you can expect a restaurant to have higher rates compared to a general convenience store due to the fire risk. If you’ve added new services to your business that increase how insurance agents assess your risk, this could be reflected in your renewal rates.

Recent Natural Disasters

Wildfires, floods, and other types of natural disasters all impact insurance rates. These types of events require insurance companies to make large payouts to many customers at the same time. Since these types of natural disasters are occurring with greater frequency, insurance companies must also prepare for them by increasing premiums to ensure there’s enough funding to cover widespread losses.

Rising Construction Costs

Companies throughout the United States are seeing higher insurance premiums due to changes in the supply chain. In the past few years, the costs of building materials have increased due to shortages and increased demand. The increases in construction costs also cover labor and other expenses that all add up to rising quotes for home and commercial building repairs. To cover increasingly expensive repair quotes, insurance companies must raise the cost of premiums.

Current General Claims Trends

Occasionally, there will be a sudden increase in claims across an area that isn’t related to natural disasters. This can sometimes be caused by an aging community with commercial buildings that need extensive repairs or older pipes that are prone to bursting. Alternatively, there could be rising crime rates in your area that cause more companies to file claims for property damage and losses. If you have questions about rising rates, talking to your insurance company representative can give you insight into issues affecting your area. Often, you can take steps to reduce your rates by taking preventative action, such as by installing security systems or arranging for a new building inspection.

Increased Account Losses

Seeing your commercial insurance go up might not always be a surprise if your company has had to file multiple claims or even a single large one in the past few policy periods. Insurance companies assign premium rates based on certain risk factors, and it’s possible you can continue working on reducing the chances of another claim in the future. Having an incident-free policy period can lower your future rates.

Business owners need to make sure they protect their companies and employees by purchasing the right insurance coverage. For affordable, reliable commercial insurance as well as homeowners, renters, motorcycle, and car insurance, San Diego residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today

to learn how we can satisfy all your insurance needs.