SR22 rates

Q: Why do SR22 rates go up? Just in general…

A: SR22 rates rise for several reasons, but the main reason behind this is claims. When a greater number of people make claims, then a car insurance company has to raise the rates–for everybody, and not just the claimants or SR22 policy holders–in order to cover the larger payout to policy holders and keep making a profit. For this reason, SR22 rates fluctuate company by company and year by year, because the factors going into mass rate raises, and not individual ones, are always going to be changing. However, car insurance companies still need permission from the state to raise prices.

Another reason SR22 rates may be going up is because fraud makes them do so–fraud is a huge expense for car insurance companies, and its proliferation often means that innocent policy holders have to pay for it. Luckily, Alabama is not a no fault insurance state, so its problems with fraud are not quite as bad as in some other states, such as New York, where fraud is a billion dollar a year industry.