Why Did My Car Insurance Go Up? Understanding Car Insurance
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Car insurance rates can increase for a number of reasons, some of them are within your control and many are not. If your premiums have recently increased and you’re not sure why, it could be a result of one (or more) of the following:
Your Age
In California, the average cost of car insurance is just under $2,300. But if you’re aged 16 to 18, you could pay anywhere from $4,000 to $5,500. Younger drivers are more likely to make claims and drive recklessly, and this is reflected in the insurance rates.The rates generally get lower as you age, and the prices keep dropping until you reach your late 50s and early 60s. From there, rates increase.If you have recently turned 70, that could be the reason your premiums have increased. If you were already 70 or older, the rate increases could just be your insurance company’s way of keeping the price in line with other drivers your age.
Your Driving History
If you have recently made a claim, whether you were at fault or not, you can expect to see an increase in your auto insurance rates. A speeding ticket or other violation will also increase the cost, as it means you’re more likely to make claims in the future and thus provide a bigger risk for the insurance company.
Adding a Driver to Your Policy
Adding new drivers to your policy will likely increase your premiums, especially if they are in a high-risk group, such as teenagers. Parents often add their kids to insurance policies as soon as they learn to drive. It can save money overall but will cause a spike in existing policy costs.
The Rate of Claims in Your Area
Insurance companies calculate policy rates based on risk and liability. The more likely you are to claim, the more you will be charged. They don’t care how good of a driver you think you are or how sensible you are as a person. They base their calculations on statistics, and that includes charging more if people in your area are making a lot of claims.It could be that you live in a high-risk area, one where there are many cars on the road, a lot of animals causing collisions, and numerous twisting, winding, and dangerous roads. It could be that your area has high rates of theft, vandalism, weather-related claims, or even fraudulent insurance claims.Regardless of the reason and whether or not it’s your fault, if your area is more expensive for the insurance provider then it will be more expensive for you.
General Price Increases
Everything is getting more expensive right now, and insurance is no exception. As inflation rises and takes the cost of living to record heights, insurance companies may adjust premiums for renewals.One of the biggest factors is that repairs are getting more expensive. If you’ve been forced to visit a mechanic in the last year or so you will have experienced this for yourself. Parts are getting more expensive and labor costs are increasing with them. It’s bad news for car owners and it’s a warning to auto insurers, as they are often the ones left to foot the bill.
Changes in Discount Rates
Car insurance companies offer a variety of discounts, and you should always look into these discounts when you first sign up. You can save money by bundling your car insurance with another insurance product offered by the same carrier, installing safety/anti-theft devices in your car, and even joining automotive clubs.But some of these discounts are available for a limited time only. They might not remain from one year to the next and there’s no guarantee they’ll still be active when you renew.Contact your insurance company and ask them about active discounts. There may be something you can do to restore the discounts or add additional ones.
You Move
If you move to a new state or simply move the location where your car is stored, your insurance costs could change. Still, it’s important to keep your insurance company updated on every change that you make.
FAQs About Increasing Car Insurance Costs
Can your credit score impact car insurance rates?
In California and a few other states, your credit score can’t be used to determine car insurance rates.Research has shown that people with low credit scores are more likely to file insurance claims, so many auto insurance companies will factor these scores into the equation. If your credit score drops, it could send your policy rates the other way, but not in California.
Can my income affect my car insurance rate?
California car insurance companies cannot use your income to set your car insurance premiums, so an increase/decrease in your salary should not directly alter your premiums.
Why did my car insurance go up without me knowing?
The insurance company simply sees you as a greater risk than it did before. It could mean that you have made a claim or been given a speeding ticket. Either way, you should contact your insurance company for more information.
Why did my car insurance go up when nothing changed?
If absolutely nothing has changed and you have not entered a high-risk age group, you could be a victim of general rate changes in your area. These can be the result of higher claims and more cases of vandalism and theft.
Is it normal for car insurance to increase every year?
Yes, it is not uncommon for rates to increase slightly every year. However, most rate changes are small and result from growing inflation.
How can I get cheap car insurance?
If you are frustrated by increased insurance costs, remember that there could be cheaper alternatives out there. Run a comparison search for auto insurance companies that suit your needs. Once you find the best rates, look into discounts regarding safe driver courses, membership clubs, and multi-policy discounts to bring the costs down even further.
Summary: Why Your Car Insurance Premiums Have Increased
Many of the reasons that car insurance providers increase premiums are out of your control, including inflation increases and the rate of claims in your area. However, there is always something you can do when it comes time to renew: choose a different provider.Drivers often choose the easiest route, the path of least resistance. Rather than bother with the hassle of comparing, contrasting, and then considering discounts and add-ons, they simply let their policy renew. But this is very rarely the cheapest option. It’s often the most expensive.So, if you’re not happy with your current auto insurance premiums, take your business elsewhere. The car insurance industry is highly competitive and there are plenty of other companies that will take your business.
