Many policyholders ask why did my auto insurance go up all of a sudden. Considering that premiums have been steady for a long while you would suspect that there is a change somewhere in circumstances that led to rate increase. It may come as a surprise at renewal but there can be fundamental shifts on individual particulars, which are bases of policies. And that results in raised prices of various sizes depending on the underlying influences. Let’s try to identify and make sense of them.
The ideal scenario should start with a policyholder who has done a comprehensive comparison recently before choosing the best carrier for him/her. This would suggest that he/she started with a highly competitive and reliable name. This assumption would minimize the possibility of automobile insurance price rise due to incompetence of the company. Therefore, it would be due to changes in personal circumstances.
We should also assume that the claim and driving history remain the same. So, the jump is not because of accidents and moving violation traffic tickets. The question of how much do premiums go up after accidents is discussed in another post on this site, if you want to read. Now we can have a look at several other and more personal reasons as to why vehicle insurance rate increase might happen.
Deteriorating Credit History: Many policyholders have been complaining about sudden around a twenty percent jump in their costs. Latest financial problems caused hardship across the country. People who were not worried about money issues suddenly start realizing that they are having a few problems with settling bills in time. Some of these troubles may be temporary while others are unfortunately prolonged.
Policyholders and new applicants with deteriorating credit scores are suffering now that many companies take them into account. Credit based scores are now here and we have to deal with it. We can actually take advantage of it to get even more savings. If they are causing car insurance rate increase for some people they must be having the opposite effect on drivers with good credit history.
Unfortunately this alone can cause as much as a twenty percent fluctuation. If this is something you suspect happening in your case you should check the score, which can be done free of charge. You should also find out about the ways to improve credit score and enjoy better prices. At least you may be able to reduce the impact.
Other drivers in the house: This would be explained better with a simple example. A middle-aged couple with pretty low rates may see a sudden rise as soon as one of their children comes to driving age. Companies consider the chance of another driver in a household getting the keys to the automobile. They do not need to be related. Their existence in the house would explain why the premium went up.
There may be a way to reduce their impact and you should discuss this possibility with the company. For example, they may explicitly be excluded from the coverage. This may be possible completely or in some states it would only reduce the amount of compensation they can receive and it would usually be the minimum levels set by the state for liabilities.
Automobile insurance for married couples or people in a committed relationship would usually be cheaper. However, a recent marriage to a driver with bad record would make it expensive for the other spouse/partner. Possible ways of reducing the effects of listed drivers in such cases discussed in that post separately.
Change of automobiles: Some makers and models are considered high risk. When you are looking for a new car you need to keep this in mind. Sport cars and SUVs are the obvious ones that will cause vehicle insurance prices to go up. Buying an expensive car will mean that you raise the valuation on collision and comprehensive coverage that can push premiums up. Specifications of vehicles are influential determinants in quote calculations and any changes in them will affect the rates positively or negatively depending on the level of transition.
So, you should make sure that you look into possible effects on rates before committing to buying a new auto. We have another page totally dedicated to insuring cars and you should have a look at it before moving away from this site.
Recent Move: You may have moved just down the road a few blocks and not thought much of it. But even such move can be influential in many ways. This is especially true in cities because they usually have diverse neighborhoods and differentiating crime and auto theft statistics. You can read about getting better deals in cities further. You could see a huge cost rise if you move from a suburb to a town center.
Even changes in jobs or workplaces can cause considerable fluctuations on automobile insurance premiums because it would prolong or reduce the commute (and yearly mileage).
It may not necessarily be the zip code that is problem. Switching homes can be influential because of different facilities. You may have had a garage or private parking with the old accommodation and losing it when you move would mean that you now have to face higher rates. You may not have thought that far but every little thing counts.
Ageing: Going over 70 years old is another reason. Many of them raise rates for older motorists. This topic is again discussed in another post in details. Just follow the previous link.
What to Do when Auto Insurance Premiums Increase?
Probably the first thing to do is to ask the company why did my car insurance go up? They may have gotten something wrong and it may be corrected quickly upon explanation. Or you may come to an agreement on how much more they can charge you. Believe it or not talking to them works.
However, this should not stop you from looking elsewhere as well. A quick online quotes comparison show exactly where you stand at this moment. It may be that some adjustments had to be made for any of the above or a different reason and the current carrier is still the cheapest when you take everything into account.