Why Does My Car Insurance Keep Going Up?
If you cause an accident or get a few speeding tickets, you won't be surprised if your auto insurance premium rises. However, in cases where there are no wrecks or tickets, a rate increase may leave you perplexed.
Rates are set by providers based on certain factors over which you have no control. Learn about these factors and what you can do to lower your rising auto insurance rates.
Which Rate Increase Factors Can You Control?
When determining your car insurance premium and policy renewal rates, insurers consider a variety of factors.
Your Credibility
A credit-based insurance score is used by many insurance companies. Your credit history and the types of credit you have, such as loans or credit cards, can all have an impact on your car insurance rates. If your credit score falls, your insurance company may raise your premium when it comes time to renew your policy.
What you can do: If your car insurance rate rises as a result of a drop in your credit score, work on improving your credit. Pay your credit cards on time to keep your balances low.
Your Claims History and Driving Record
If you cause an accident, the provider may view you as a higher risk and raise your rates. However, if you are involved in several accidents for which you were not at fault, a carrier may classify you as a high-risk driver. An insurer may also raise your premium if you file a large number of comprehensive claims for things like broken windshields, weather damage, or animal contact, such as hitting wildlife.
What you can do: Avoid mishaps. Minor damage, such as a cracked window, must be paid for out of pocket.
Convictions or Surcharges in the Past
Driving under the influence and speeding are two examples of traffic violations that may cause your insurer to raise your auto insurance premium. Following a collision, the provider may also raise your rate if you were 50% or more to blame for the accident. In addition, a history of late payments may result in a price increase by the insurer.
These types of increases are referred to as "surcharges" by carriers. The increase may last until you demonstrate that you are a good driver. The amount of the surcharge and the length of time you must pay it will be determined by the severity of the incident.
What you can do: Improve your driving skills after an accident in which you were at fault. Avoid mishaps. Consider including accident forgiveness in your coverage.
What Other Factors Affect Your Car Insurance Rates?
Other factors, some of which are beyond your control, may also cause a rate increase.
- Change in marital status: According to statistics, single drivers file more claims than married drivers. As a result, if you divorce or, in some cases, if a spouse dies, your rate may rise.
- Adding drivers to your policy: If you add a new spouse or a teen driver to your auto insurance policy, your premium may rise.
- Gender marker shift: Female drivers have fewer traffic accidents than male drivers. As a result, if you change your gender marker from female to male, the insurer may raise your premium.
- Your location: If collision, weather-related damage, auto theft, or vandalism claims increase in your ZIP code, your provider may raise your premium.
- Your car's make and model: If there is an increase in claims for your car's make and model, your carrier may raise your rate.
- Your age: Younger drivers typically pay higher insurance rates. While your rates may decrease when you are a young adult and in middle age, they may rise when you reach your 60s.
- Lost discounts: If you have a good driver discount and have an accident, an employer discount and change jobs, or cancel a policy for which you have a multipolicy discount, your car insurance rate may go up.
- Across-the-board rate increase: For a variety of reasons, insurance companies may raise the rates of all their policyholders. These include an increase in claims, an increase in the number of cars on the road, and an increase in accidents involving injuries and fatalities.
How to Lower Your Auto Insurance Rates
Many factors can be used by insurance companies to determine your rates. However, this does not imply that you have no control over your premiums. When it comes time to renew your policy, go over your coverages again. Remove anything you no longer require. For example, if you've paid off your car, you might think about dropping collision and comprehensive coverage.
Speak with your agent to see if you are eligible for any discount programs. Some companies, for example, offer significant discounts for vehicles equipped with safety and security features such as airbags, anti-theft systems, and daytime running lights. When you combine home and auto insurance or purchase more than one auto policy, many carriers offer a discount.
Raising your deductible can also help you save money. While you may have to pay a little more out of pocket after a covered loss, you will benefit from a lower rate.
If you drive a car that is expensive to insure, consider trading it in for a more practical vehicle. Premiums for luxury or electric vehicles are frequently higher because they are more expensive to repair.
Frequently Asked Questions (FAQs)
What determines car insurance rates?
Car insurance rates are determined by a variety of factors unrelated to your policy, such as your location, age, gender, and marital status. Data on how frequently people in these different demographics are involved in accidents will influence your rates. Direct factors include the type of vehicle, coverage limits, deductibles, driving record, and claims history. Your insurance company may also offer you a discount if you purchase multiple types of coverage.
How do you compare car insurance rates?
There are several websites that allow you to directly compare quotes from various insurers. You may be required to enter contact information on these websites, and you may end up receiving more than just car insurance quotes. If you don't want to be bombarded with marketing, you can contact a few insurers directly and request a quote. Just make sure to request policies that are comparable in terms of coverage and deductibles so that you can make an accurate comparison.