Why Did My Car Insurance Go Up? Understanding the Factors Behind Rate Increases
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How much is car insurance in 2024? There are a variety of factors that combine to help car insurance companies determine their rates. Some factors depend on your personal situation, while others depend on your provider’s policies, the economy, and other external factors.
Keep reading to learn more about reasons your car insurance might increase.
Why Did My Car Insurance Go Up? Common Causes
Why is my car insurance so high? Auto insurance rates can increase for a variety of reasons.
Consider the following causes for sudden rate increases:
- Have you been in any accidents or received any tickets?
- Are you driving more often than you used to?
- Has your credit score decreased?
- Did you change the kind of car you drive?
- Did you add any new drivers to your car insurance policy?
- Have theft, natural disasters, or accidents increased in your area?
- Are you still eligible for the same discounts?
- Has inflation increased repair costs for your vehicle?
We explore some of these common causes below.
Personal Factors That Can Increase Car Insurance Costs
New Traffic Violations or Adding a Driver
Any incident that affects your driving history or insurance claims history indicates you're a higher risk to insurance companies than other drivers with a clean history. If you get into an accident, receive speeding or parking tickets, or file insurance claims for any reason, you’re more likely to see a car insurance increase when it’s time to renew your policy.
If you add a new driver to your policy, their personal information will also affect your rates. If they are considered risky due to their driving history, your insurance company will bump up your rates. For example, adding a teenage driver will typically increase your insurance rates.
Moving to Higher-Risk Areas
Your location’s demographics will heavily affect your premiums and the types of coverage required or recommended. If you move to an area with higher crime rates, more people, or a higher accident rate, your insurance company may deem you at a higher risk of having to file claims. In addition, if you move to an area that requires higher coverage limits or additional types of coverage, your premiums will automatically increase.
Buying a New or More Expensive Vehicle
Why did my insurance go up with a new car? New and expensive vehicles are more likely to cost more for repairs. They are also at a higher risk for theft. If you buy a newer vehicle, a vehicle that's expensive to repair, or a vehicle with high-demand parts that might attract thieves, you’ll likely see your auto coverage increase.
External Factors Affecting Car Insurance Premiums
Rising Repair Costs
Inflation has caused rising costs across the car and insurance industries. Cars now cost more to purchase and repair. Therefore, auto insurance companies have raised their rates to cover the costs associated with claims. Unfortunately, there’s not much you can do to mitigate rate increases due to inflation. However, you could opt to drive a vehicle with low repair costs.
Changes in Industry Claims or Regulations
The car insurance industry as a whole and individual car insurance companies have standardized ways of calculating premiums. If these methods change, it can change how much you pay.
Your insurer may begin to weigh factors differently that might increase your rates. For example, if your insurer wants to consider your credit score more than it did in the past, car insurance rates may increase for policyholders with subpar credit.
Changes to Car Insurance Discounts
Discounts may be changed or eliminated during renewal periods. If you receive an introductory rate for your first term, your rates may go up after that discount expires.
In addition, other discounts can be altered, or you may need to verify that you still qualify for specific discounts. For example, student discounts may be removed from your account if you drop below full-time. Check with your insurance provider to confirm which discounts are being applied to your policy.
Tips To Lower Your Car Insurance Rates
Your driving record is one of the primary factors used to determine your car insurance premiums that is mostly in your control. While you can't stop others from causing accidents, you can do your best to maintain a clean driving record by driving as safely as possible. If you're confident in your ability to drive safely, a telematics device might help your insurance company calculate a more accurate rate for you.
You should also review your insurance coverage before your annual policy renewal. Make sure you have appropriate types of coverage and coverage limits. Another way to find cheap car insurance is to compare quotes from multiple providers. Tools like EverQuote let you compare quotes to find the best rates.
Shop Around for the Best Quotes
Many auto insurance policies can become expensive over time as various factors change to increase your rates. Unfortunately, we can only control some of these factors, such as how we drive, where we live, and what type of car we own.
However, one of the best ways to save on car insurance is to compare quotes from multiple companies. Insurance prices change every day, so the best way to get the right insurance for the right price is to compare and shop often.
Use EverQuote today for free quotes.