If you’ve looked at your car insurance bill lately and wondered why it’s so expensive, you’re not alone. Car insurance premiums vary widely from person to person, and many drivers are surprised by how high their rates are.
Part of what makes car insurance complicated is that many different factors determine your rates, including your personal driving history, vehicle details, and the details of the policy you choose. It can be tricky to point to just one factor as the reason why your rates are higher than expected.
However, understanding the different factors that impact your high car insurance rates will help you answer the question, “Why is my car insurance so high?” And from there, you can make more informed decisions about managing and potentially lowering your rates.
What Factors Are Driving Up Your Car Insurance Rates?
When you ask, “Why is my auto insurance so high?” there are several possible answers. Consider these key factors that all play a role in determining how much you pay in car insurance premiums.
1. Age and Driving Experience
Teenage drivers are the most likely to get into motor vehicle accidents, so their insurance rates are typically higher. As drivers get older and gain more driving experience, their car insurance coverage generally gets less expensive.
If your age or driving experience is the reason why your car insurance is so expensive, there’s not much you can do except try to build a clean driving record. Over time, your auto policy rates will likely decrease.
2. Driving Record and History of Accidents
Another major factor car insurance companies use to determine insurance costs and rate increases is your driving record. A clean record without an at-fault accident or traffic infractions shows insurance companies that you’re a lower-risk driver. As a result, they’ll offer you lower rates.
If you do cause an accident, expect your rates to go up. The national average insurance increase after an accident is around 36% higher annual premiums. Similarly, insurance increases after a speeding ticket because insurance providers will see you as a higher-risk driver.
3. Vehicle Type and Model
Your vehicle could also be the reason why your car insurance rates are so high. Generally, the more expensive your vehicle is to repair or replace, the higher your premiums will be. If you want to save money on your car insurance, consider swapping out your current vehicle for one of the cheapest cars to insure.
4. Coverage Choices and Deductibles
The more car insurance protection you purchase, the higher your rates will be. For example, collision and comprehensive insurance are both optional coverage types you have to pay extra for. If you’re trying to reduce your rates, reevaluate whether you need all of the coverage you currently have. You could cut your comprehensive coverage, collision coverage, or other optional additions to save on your premiums.
5. Credit Score and Insurance History
Many people don’t realize that their credit score may also play a role in determining their car insurance rates. Car insurance companies may view something with a higher credit score as a lower risk of filing a claim, leading to potentially lower premiums. So, by improving your credit score, you may be able to access cheaper car insurance rates.
6. Inflation and Economic Factors
As inflation drives up the price of auto parts and repairs, car insurance rates will typically go up, too. While economic factors like these are out of your control, pay attention to them so you’re not blindsided if your rates change as a result.
7. Where You Live and Local Laws
Your location also significantly impacts how much you pay for car insurance. In states with high population density and traffic congestion, insurance companies tend to charge more to account for the greater likelihood of accidents and claims. Your state may also require more minimum car insurance coverage, which would lead to higher rates than in states with lower minimums.
8. Loyalty and Insurance Lapses
Some car insurance companies offer discounts to drivers who repeatedly purchase their car insurance from them. So, personal factors like switching insurance companies often could lead to higher rates as you miss out on these discounts.
If you let your car insurance lapse, that may also drive up your premiums once you purchase a new policy or reinstate your previous one. Insurers view drivers who have periods of lapsed insurance as higher risk, leading to higher rates.
How to Save on Car Insurance
Owning a vehicle is expensive, and high insurance rates are a big part of that. There are ways to save money, though, including these unexpected ways to reduce your car insurance rates.
But really, the best way to save on car insurance is to regularly compare your options. There may be a much better deal out there that you’re missing out on because you haven’t shopped around for car insurance lately. Luckily, comparing your car insurance options is easy with EverQuote. Get your free custom comparison today to find the best deal on your auto insurance coverage.