Why Did My Car Insurance Go Up?
Has your car insurance gone up; have you been left wondering why you’re now paying more money every month? Your car insurance premiums can increase for a number of reasons, all of which we will address in this guide.
Find your best rate on Car Insurance!
Attention: Still Open During the Financial Crisis...
Tip: Act now to see if you qualify for lower rates!
Compare free personalized quotes from the nation's top providers.
You Were in a Car Accident
Your car insurance can increase if you are in an at-fault accident, but it can also increase even if the accident wasn’t your fault. The good news is that your auto insurance rates won’t increase immediately, but you’ll likely be stung with higher auto insurance premiums once it comes time to renew.
This is actually why many policyholders choose to pay for small repair costs out of their own pocket, and, in some cases, this can be a cheaper option. Claims can remain on your record for several years and you’ll be expected to pay higher rates during that time.
You Got a Speeding Ticket or Another Traffic Violation
Moving violations, speeding tickets, and more, can all impact your car insurance rates and if you have recently been given a ticket then this could be why your insurance costs have increased.
It’s all relative though, and a ticket for traveling just a few miles over the speed limit won’t raise rates as much as a ticket for going twice the limit. One of the worst citations you can get is for a DUI or DWI, as this can seriously increase your premiums.
A single incident, be it a ticket or a crash, could see your premiums grow by up to a third, although it all depends on the individual and the provider. Allstate seems to be one of the least forgiving when it comes to speeding tickets and auto accidents but Progressive and Farmers are also very strict.
Your Credit Score Dropped
Your credit score is tied to a lot of things, from your ability to get credit cards and loans to your auto insurance. If your credit score drops then your insurance policy could increase, although this practice is illegal in Hawaii, California, and Massachusetts.
A bad credit score can significantly increase your premiums and while all auto insurance companies won’t consider your score, many of them will and none of them have to tell you if they do.
To keep car insurance costs down, keep your credit score up. Not only could it save you as much as $1,200 a year (based on the worst-case scenario) but it will also help when applying for new loans, lines of credit, and other types of insurance.
Things Change in Your Area
Insurance is all about risk and reward. Car insurance companies look at the risk factors for your demographic, driving record, and area to determine how much of a risk you are and how high your premiums should be as a result.
For instance, they know that young drivers are significantly more likely to be involved in an accident than drivers over the age of 30, and the younger they are, the more likely those accidents become. They also have all the statistics to show how common accidents, thefts, and other risk factors are in your area, and if these things increase at any point, then your premiums may increase with them.
It’s not your fault that people in your town are being a little more reckless than average, but the insurance industry isn’t based on trust and promises. It’s based on statistics and probability, and if they deem you to be more of a risk because of your neighbors then they’ll bump-up your premiums.
Some of the things that can impact premiums based on your local area include:
More Uninsured Motorists
Uninsured motorists are a massive liability and if there is a sudden increase in the number of these drivers in your area, your car insurance policy could increase.
Car insurance companies lost over $2 billion in uninsured driver claims every year and while this is a problem that they and the authorities are keen to eradicate, it’s one that seems to be getting worse as the years progress.
The only way for insurance companies to offset these extra costs is to pass the expense onto the policyholders, which means you pay for other peoples’ recklessness.
Although this is not something that can happen out of the blue, if you live in an area that is more prone to extreme weather, including hurricanes and floods, you’re more likely to file insurance claims, which means your premiums will increase.
Safety features, new cars, and anti-theft devices can all help to reduce the cost of your auto insurance policy as they’re less likely to be stolen and involved in serious auto crime.
However, this will mean nothing if there has been a sudden spate of car theft and damage in your area, especially if you’re driving a car that the criminals have been targeting.
Accidents involving drunk driving can be incredibly costly in terms of claims, bodily injury, and fatalities. This is an issue in all states, but one that seems to be more common in some areas than in others.
Distracted driving is on the rise, with more and more drivers giving their full attention to their phones and paying less heed to the roads ahead of them. As this problem spirals out of control, insurance companies are seeking to cut back and force the additional costs onto the policyholders.
Medical and Repair Costs Increased
The price of your monthly premiums can also skyrocket if there has been an increase in the cost of medical care and auto repair, either in general or with your specific vehicle.
One of the biggest issues facing new drivers is the increased reliance on high-tech devices and technology, all of which is crammed into newer cars in an effort to make them more advanced and user-friendly. But this tech can also make repairs incredibly expensive and awkward, potentially requiring endless hours of manpower and a lot of specialist parts, thereby increasing premiums.
As you can see, auto premiums can increase for a number of reasons, some of which are out of your control. Just remember that nothing is set in stone. If one provider quotes you a high price for renewal, then look elsewhere; constantly comparing and negotiating in this way can ensure your premiums stay low and you’re not paying over the odds for your loyalty.