Insurance premiums can fluctuate from year to year, and there are several factors that influence these changes. If you’ve noticed a difference in your individual renewal premium, it’s likely due to one or more of the following reasons.
Policy Type and Coverage Adjustments
The type of policy you hold plays a significant role in determining premium changes. Claims-made policies generally increase over time due to step factors, while occurrence policies tend to remain more stable. Knowing which type of policy you have is essential for understanding any shifts in your premium.
Changes in your coverage, such as adjusting limits of liability, also affect premiums. Whether you’ve increased or decreased your coverage during the policy term or plan to make changes at renewal, these adjustments will impact your premium costs.
Professional Life Changes
Your professional status can significantly alter your insurance premium. Transitions like moving from student to full-time professional, or from employed (W-2) to independent contractor (1099), will adjust your premium to reflect your new level of risk.
Experience in your profession also plays a part. Whether you’re just starting out or have a few years of practice under your belt, this progression is factored into your premium. Shifts in your professional role, such as becoming a nurse with a BSN from a caregiver role, or changes in the services you offer (like adding aesthetic procedures such as Botox), will also influence your premium due to the altered risk exposure.
Additional Coverage and Discounts
If you’ve added extra coverages—like general liability, medical director coverage, or supervising physician coverage—this will naturally increase your premium. Similarly, removing these coverages may reduce it. Additionally, make sure you’re taking advantage of discounts and credits, such as membership credits or risk management credits that are available for certain professionals, like PAs.
Location and Underwriting Considerations
Location is another important factor. A change of address, whether moving across state lines or simply to a different county, can affect your premium. Varying state regulations, tax structures, and regional risk factors will all be considered by your insurance provider.
Insurance market conditions also come into play. Changes in the broader insurance landscape, including regional and national trends, can impact underwriting guidelines and premiums across the board.
Stay Informed
These are just some of the key reasons your individual renewal premium may differ from year to year. Understanding the factors behind premium changes can help you make informed decisions about your coverage. Always feel free to reach out if you have questions or need further clarity about your insurance policy and premiums.
