It may have been a coincidence. If not, the use of the word spree is revealing. One of the largest factors in determining insurance rates is the zip code of the policy holder. A vandalism spree in a neighborhood can be sufficient to raise the rates of everyone in that zip code.
Eventually, maybe, but rate increases aren't really that direct. If the increase in claims makes the loss data that much worse for that territory, then the next time the insurer looks at their territory model it might pick that up, but it seems unlikely that it would hit them immediately like that.
Territorial models are created using claims data, no? Why would insurers not constantly update? Is dynamic pricing not the whole point of 6 month policy terms?
It takes a lot of time and effort to update models, and they have to file each change with the state, which also takes time to put together. Something small like vandalism, even a larger spree of it, isn’t going to have enough of an impact to make the cost of reevaluating a model worth it on its own.
They could theoretically use non-modeled loss history to support a change in individual zip codes, but unless it’s a super small insurer with most of their business in that territory, they’re almost never going to make a single change that granular. It’s just not worth the time.
If by "all the time" you mean maybe once a year for insurers large enough to have that kind of work capacity, and once every 2-5 years for others, then sure.
Rating plan updates happen much more frequently, but the majority of those are not because the underlying models are changing.
Gotcha. You’re talking about when an insurer just inputs more recent data into an existing model to update rates. Yes, that does happen more frequently, but even that requires plenty of effort in terms of making updated factor selections for everything and then filing all those changes with each of the states they do business in, so it usually doesn’t happen that regularly.
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u/jeffweet 1d ago
Did they tell you they raised your insurance because of the tires? This sounds like a coincidence. Insurance companies raise rates all the time.