It may not be clear to you yet but normally car insurance rates go up for a reason and mostly it is due to changes in your overall risk profile. Anything that increases your chance of getting involved in an accident or making a claim raises your premium. Below common changes in your driving history, insurance score, vehicle, address, listed drivers, marital status, age and weather conditions, crime, liability requirements in your region and state can affect your vehicle insurance rates. Adjustments in your insurer’s risk assessment, rate and discount structure and inflation can cause premiums to go up too.
As you can see you don’t have to file a claim or get a traffic ticket as even slight shifts in internal and external factors can be influential on how much you pay for automobile insurance. So, it is worth having a good look at them below. Keep in mind that you may be able to improve on some of them and others may be out of your control;
- Recent traffic violations
A recent traffic violation goes on your driving record and seen by your current insurer and any other companies you apply for a quote. You may not realize it but tickets like texting and driving affects your car insurance rates in many states and with most insurers. Avoiding tickets is a sure way of making sure not only you don’t get penalized with higher rates but also qualify for discounts.
- Accidents and claims
People may be told or under the impression that certain accidents and claims don’t matter. If you caused the accident, your rate will definitely increase. If it is allowed in your state, your insurer can raise your premium even for accidents and claims that weren’t your fault. In the end, claims cost them money and some people are more inclined to make claims than others and this is often taken into account.
- Recent lapse in coverage
This is one of the less known reasons why your automobile insurance rates go up. Most companies look at your insurance past to see if you have had continuous coverage all along or had a lapse recently. Any break in coverage, especially in the last 3 years, impacts your premium.
Auto insurance rates can start increasing when you pass age 60 or 65 depending on the state and company. Usually, motorists are considered to present higher risk as they get older. Also, you can get discounts for retiring and therefore not driving as much that can help you bring the costs back down.
- Change of vehicle
Type of automobile you drive is separately rated as well and some cars are riskier than others. You may think that your recent replacement was almost like for like but your insurer may feel justified to charge you more with your new car.
- Change of address
Depending on how big the move is, your vehicle insurance rates can be significantly influenced by it, although even moving within the same city can increase or decrease your premium. When your zip code changes, different details like population density, traffic congestion, auto theft crimes and claim data comes into play. If you move out of state, a whole new set of factors comes into effect like new traffic, licensing and insurance laws, weather and socio-economic conditions that your rates can increase or decrease substantially.
- Listed drivers
Adding or removing drivers from your policy can influence your premium more than you think. Every driver listed is rated and each person has a different rating depending on their age, gender, driving experience and record.
- Decreasing credit score
This is one of the factors that blindsides motorists the most. People’s credit score may be going down in the background and it can increase their premiums a lot depending on how bad the recent financial issues are, in states where companies are allowed to check credit scores. Probably one of the first things you should do when you feel your vehicle insurance went up for no reason is to check your credit score.
- External factors
You may feel like your auto insurance went up for no reason but this is hardly ever the case. There are a few things going on outside of your control. They appear to have nothing to do with you but you don’t live in a bubble. For example, if the number of insured drivers increases in your state that would raise legitimate concern among insurers. Although they don’t contribute to the total premiums collected in your state, they still drive and cause accidents and someone has to pay for them. The neighborhood may be seeing increased levels of traffic, accidents, auto thefts and vandalisms that need to be taken into account. It could even be state level changes in legislation and minimum requirements that increases the claims and settlements. Even competition in the market affects your premiums. If one of the top companies pulls out of the state it can affect the prices because of reduced rivalry. Inflation is another reason that forces prices to go up.
- Your insurer changes its rating structure
It is not unusual for car insurance companies to adjust their rates every so often depending on various inside and outside changes. Perhaps the carrier is struggling to cope with recent claims or in a process of restructuring. Their focus may have shifted towards other factors when they assess risks or price policies. Any one of these internal adjustments within your current insurer explain why your vehicle insurance is going up for no reason you can put a finger on? Premiums are the main source of income for carriers. Therefore, they don’t have much option but to put them up when they face a large number of claims due to freak weather conditions, rise in auto crime and vandalism, vehicle repair costs and valuations.
Regardless of thinking your vehicle insurance rates are going up for no reason or knowing exactly why, you should always shop around to keep an eye on the prices in the market. Get a few quotes and see if you are seeing unfair premium increases or your current provider is still very competitive in the market.