Understanding Erie Insurance Rate Lock: What Happens When Your Term Ends?

Erie Insurance offers a unique benefit to customers who have maintained a clean driving record—Rate Lock. If you qualify, this benefit can offer you the peace of mind of not worrying about premium increases for the next three years. But what happens when that term ends? Let’s take a deeper dive into what Erie Insurance Rate Lock is and how it works, as well as what to expect once your Rate Lock period comes to a close.

What Is Erie Insurance Rate Lock?

Erie Insurance Rate Lock is a benefit provided to policyholders who have had no tickets, accidents, or claims within the last three years. If you qualify, your premium rate is locked in for the next three years. This means you won’t have to worry about your insurance rates increasing during that time period, regardless of changes in the market or insurance trends. The only time your rate will change during the three-year term is if you make any these 3 qualifying changes:

• Changing vehicles
• Adding or removing a driver
• Changing your address

By taking advantage of Rate Lock, you get the stability of knowing your premium will remain consistent, so you can budget without worrying about surprise hikes. It’s a great way to keep your insurance affordable and predictable.

What Happens When Your Rate Lock Ends Or You Make a Qualified Change Midterm?

So, what happens when your three-year Rate Lock period comes to an end or re-rates midterm due to a qualifying change? Well, there are a few possibilities, depending on your circumstances.

If You Requalify for Rate Lock

At the end of your Rate Lock term, your policy will be recalculated for renewal based on the most current rates. If you’re still eligible for Rate Lock (meaning you haven’t had any tickets, accidents, or claims in the last three years), you can apply for the benefit once again.

When you qualify again, your updated premium will be locked in for another three years. This gives you the continued peace of mind that your rates won’t change during that time, letting you enjoy the same benefits you had before.

If You Don’t Requalify for Rate Lock

If your driving record has changed and you no longer meet the requirements for Rate Lock (for example, you had an accident or claim during the previous term), Erie Insurance will recalculate your premium based on today’s rates. Instead of locking in the rate for the upcoming 3 years, your policy will re-rate annually like a traditional auto insurance policy renewal.  

However, there’s still a silver lining. Even if you don’t qualify for Rate Lock, you’ve still benefited from it during your previous term. For example, let’s say you had an accident in 2021. If you were on Rate Lock, you were able to avoid any surcharges for that accident on your premiums for the past two renewals—something that would have applied if you hadn’t been on Rate Lock. So while your rate may change after the lock ends, it could be less than if you had never had Rate Lock at all.

Why Erie’s Rate Lock is a Valuable Feature

Erie Insurance Rate Lock is a powerful tool for drivers who want to avoid the uncertainty of fluctuating premiums. It offers stability and predictability in an industry where rates can change due to factors like inflation, claims history, or shifts in the market.

By locking in your rate, you gain:

• Predictability: No surprise rate increases for the next three years, as long as you don’t change your vehicle, drivers, or address.
• Stability: You’ll enjoy the same premium rate even if market conditions shift during the term.
• Potential Savings: Even if you don’t qualify for Rate Lock in the future, you may have avoided a significant surcharge due to a past claim or accident.

Conclusion

Erie Insurance Rate Lock is an excellent option for safe drivers who want to lock in a fixed premium rate for the next three years. But, it’s important to understand what happens when your term ends or when you make one of the 3 qualifying changes that “break” the rate lock midterm. If you continue to meet the eligibility requirements, you can apply for Rate Lock again. If not, you may face a rate recalculation that could lead to an increase in premium if rates have increased or you have a surcharge due to a claim or ticket during your Rate Lock period that you were able to avoid on your prior Rate Lock term. 

At the end of the day, Rate Lock helps provide peace of mind and financial stability, making it a feature worth considering for any Erie Insurance policyholder.