Increase in Insurance Rates Essay Example | Topics and Well Written Essays - 500 words

Increase in Insurance Rates - Essay ExampleAs result the cast directly relates to the premium paid. One factor that causes amends rates to the development is the occurrences of particular risks. For instance, an increase ion the occurrences of machine accidents in a particular region ill normally lead to the increase of the premium supercharged for motor cover. Several instances have been evidenced where the prevalence of a particular risk has led to insurance firms charging higher interest rates for such risks. Other insurers have been noticed to shun covering such risks. Another factor that has seen insurance rates go up is the moral hazard among the insure. This is the situation where the insured party takes no responsibility to prevent the occurrence of risks (G, 1960). This normally arises from the gratification that after all I am insured. The person therefore takes no duty to prevent certain risks from occurring. This will in the recollective run, lead to an increase i n the prevalence of some risks. As a result, insurance firms will increasingly increase the rates so that the insured chuck out more in form of premiums. The increase in the uncertainties realized in some dimensions in life has made insurance firms take rootage measures to ensure they can cope with such situations.