Getting hit with a higher car insurance bill can be frustrating, especially when nothing seems to have changed. There are many reasons your premium might increase, and some may not be immediately obvious. Understanding the factors behind the rise can help you figure out what to adjust and how to potentially lower your costs.
Reasons Why Car Insurance Costs Have Shot Up
There are a lot of causes when it comes to your insurance bills rising:
- Moving Violations
- At-Fault Accidents
- Not-At-Fault Accidents
- Comprehensive Claims
- Adding Drivers or Vehicles
- Claims in Your Area
- Moving to a New Location
- Your Age
- Losing Discounts
While this list covers come common reasons, your best bet is reaching out to your insurer directly. They can explain to you the change in cost for your specific situation. Plus, they may even be able to help you lower your bill again!
Moving Violations
Traffic violations, especially serious ones or multiples, signal to insurers you’re a higher-risk driver. A DUI, for example, is a major red flag. Insurers see this as leading to increased risk of future incidents. Even minor tickets can impact your insurance premium. Even a single speeding ticket could tip the scales.
At-Fault Accidents
Accidents where you’re deemed at fault often lead to increased premiums. Insurance companies see a history of claims as predictive of future claims. It’s all a numbers game.
This increases the financial risk of paying for future losses. How much an accident claim will impact the amount you pay depends on several factors.
Not-At-Fault Accidents
It might seem strange, but in some states, even accidents you didn’t cause can bump up your rate. Some insurers have data indicating a trend. This will increase future risks. Some drivers seem to attract incidents, even if they’re not technically at fault.
Comprehensive Claims
Comprehensive coverage handles damages outside of collisions, like theft, vandalism, or natural disasters. Filing these types of claims can sometimes trigger a rate increase. It depends on both your insurer and the situation.
Filing several comprehensive claims could increase risk on auto rates. If there are enough, this can lead to higher premiums for increased future losses. This is especially the case if many claims are filed in a short period.
Adding Drivers or Vehicles
Adding a new car, particularly a more expensive or theft-prone model, often means a higher premium. Similarly, adding drivers, especially teens or those with spotty records, raises your risk profile.
Claims in Your Area
This one feels unfair, but even with a perfect record, you could see an increase. This could be if your area experiences a surge in claims. It could be due to more accidents, thefts, or severe weather.
Moving to a New Location
Changing your garaging address (where your car spends the night) can impact rates. If you move to an area with a higher risk profile (more claims, etc.), your premium could go up.
Insurers base costs partly on location-specific data. This can lead to rising auto coverage expenses, depending on the location you move to. Some locations are much riskier than others to insurance companies.
Your Age Matters
As drivers get older, particularly into their mid-70s and beyond, rates can creep back up. It’s not as sharp a spike as with young drivers, but there’s a perceived increase in risk. Rates may be impacted at this stage of life based on these factors.
Losing Discounts
Many discounts are tied to maintaining a clean record (no tickets, accidents). Losing those discounts, coupled with the incident itself, can result in a double whammy for your rate. For example, you may no longer be eligible for discounts if any accident or related incidents happen.
What to Do After Your Car Insurance Raises
Getting an increased premium for vehicle insurance doesn’t mean that all discounts and price deductions go away. You can still consider the following tips if you find that your rate went up:
- Talk to Your Insurer
- Consider Usage-Based Insurance
Talk to Your Insurer
If your premiums have gone up, don’t just accept it — reach out to your insurer. Ask them to review your policy and see if there are ways to adjust your coverage without compromising protection.
You might be able to drop unnecessary coverages, especially if you’re insuring an older vehicle. Also, check for any discounts you may have missed — safe driver programs, bundling policies, and paying your premium in full could all help reduce your costs.
New or updated discounts may be available based on current offers, so it’s always worth asking. A quick conversation with your insurer could lead to meaningful savings.
Consider Usage-Based Insurance
If you’re a low-mileage or very careful driver, programs that track your actual driving habits (using telematics) might save you money. Insurers like to encourage safer driving behavior, so this encourages improvements in driver conduct. But be aware of privacy considerations before signing up. For many this means being watched closely which impacts what they share.
Overall
Understanding why your car insurance rates have increased is the first step toward managing them. Whether it’s due to accidents, added drivers, location changes, etc., there are often ways to adjust your coverage and find savings. Don’t hesitate to reach out to your insurer. They can clarify the reason for the increase and help identify any discounts or adjustments you may qualify for. Taking a smart approach could help you reduce your premium and avoid overpaying in the future.
