Wondering ‘Why Did My Car Insurance Go Up?’ Get Answers
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No one wants to pay higher rates for car insurance, but you may notice periodic increases in your auto insurance premium. You may be wondering, “Why did my car insurance go up?”
While you won’t find a one-size-fits-all answer, understanding the common reasons behind auto insurance rate increases can also help you find ways to lower them in the future.
Here’s what you need to know about what causes car insurance rate increases and what you can do to avoid them to get lower rates.
Find Better Rates for Your Car Insurance
Find Better Rates for Your Car Insurance
Why Did My Car Insurance Go Up? You Moved
If you moved within the last year, which may be the most common reason for rate changes, your car insurance rates might have increased. Moving to a new state can adversely affect your credit score and your premiums based on state minimum insurance requirements, the state’s urbanization, whether you’re in a no-fault state, and the overall assessed risk within that state.
For example, you’re sure to see an increase in your auto insurance policy if you live in one of the most expensive states for car insurance:
Interestingly, Texas and California don’t make the list, so you may not see a price increase if you move to these states. While they’re the two most populous states, a number of factors other than population size drive up rates in the most expensive states, such as:
- Higher rates of uninsured drivers
- More high-risk drivers and/or more claims filed
- Poor weather or consistently wet weather
You Had an Accident Within the Last Year
A car accident is the most obvious reason why your insurance costs go up from one policy to the next. If you’re in an at-fault accident, have to file a police report, and need to file a claim with your insurance company, your car insurance rates are likely to increase.
But the real kicker is that most car accidents are preventable. According to the National Highway Traffic Safety Administration’s Fatal Accident Reporting System, between 94% and 96% of car accidents are due to human error.
Weather, mechanical malfunctions, or other issues aren’t the culprit. Some of the most common causes of accidents include:
- Alcohol impairment
- Distracted driving
- Lack of experience
- Aggressive driving, especially from high-risk drivers such as teenagers
- Traffic violations or ignoring traffic laws
While not every accident is preventable, it pays to drive defensively to avoid accidents and the associated hike in your car insurance premium.
It’s worth noting that if enough accidents or insurance claims occur within a given year, it could impact all policyholders. Even if you’re a safe driver and weren’t at fault during an accident, too many claims can disrupt an insurance company’s combined loss ratio. The result is higher car insurance rates across everyone’s policies.
You Lowered Your Deductible
Another reason your car insurance premium increased is the deductible on your collision coverage, comprehensive coverage, or full coverage. Simply put, a deductible is how much you pay out of pocket for repair costs after an accident.
If you lower your deductible, say from $1,000 to $500, you’ll pay more per month for your car insurance. The reason is that your insurance company pays more money if they approve your claim.
You Got a Ticket or Moving Violation
Speeding tickets and moving violations can wreak havoc on your car insurance rates. While there’s no way to tell exactly how much of a price difference your policy will change due to a ticket, rest assured, your premium will increase.
If your insurance rates increase due to a ticket, shop around for other car insurance companies to ensure you’re getting the best deal and not paying too much for the same coverage.
Your Car Insurance Lapsed
If you’re still asking, “Why did my car insurance go up?” it could be that you no longer had insurance coverage. A lapse in auto insurance means that your car no longer meets the minimum state requirement for coverage.
The lapse timeframe is between the moment your insurance expires and when you purchase new insurance, hand in your vehicle plates, or offer proof of repossession or proof of purchase for insurance in a new state if you moved.
Often, the driver is responsible for the lapse. They fail to make insurance payments or have excessive accidents or violations. Your premium may go up once the DMV is aware of the lapse. You may also face penalties such as license suspension, fines, and community service.
Pay your bill on time and report any incidents to your provider. You will avoid a lapse in insurance and the subsequent higher premiums when reapplying.
Your State’s Minimum Car Insurance Requirements Changed
It doesn’t happen often, but sometimes a state’s minimum requirements may change for auto insurance coverage. The car insurance companies are most likely aware of this before it happens and will adjust your premium accordingly. However, it helps to stay up to date with all state law changes.
You Have Special Offers That Expired
Many car insurance companies offer discounts and deals to unlock a new customer base. However, these deals may be temporary. Some of these specials that expire include discounts for:
- Being a good student
- Insuring more than one vehicle at a time
- Owning a car with particular safety features
- Accident forgiveness, which is usually a one-time courtesy
- Bundling, which may end if you sell your home
- Loyalty, which can end if you switch insurers
Less common discounts might include a price drop for newlyweds, employee-based discounts, distant student discounts, and the list goes on.
Major life changes — moving to a new area or graduating college — or subtle shifts like swapping one car feature for another may adversely affect your car insurance premium. To avoid any surprise charges, consult your insurance agent before foreseeable changes. This way, you can decide if you really want that additional feature or would rather pay a cheaper premium.
You Provided Inaccurate Information
Misinforming an insurer is risky and can result in a higher-than-expected premium. Some people give out a different address or conceal a poor credit history or driving history to get a lower premium. This technique only works if the premium is contingent upon factors such as location, driving record, or credit score.
That said, lying to an insurer is never a good idea — it’s insurance fraud. While some may never be found out, others aren’t so lucky. Not only does providing incorrect information leave you with a surprisingly higher premium once the insurer runs background checks, but it’s against the law.
When filling out initial questionnaires, be as upfront and honest as possible, so you don’t run into problems later on. You’ll get a more accurate quote from your insurance company and be safe from legal trouble.
You Didn’t Shop Around
If you’re still asking, “Why did my car insurance go up?” because you didn’t meet any of the above reasons, there’s a far simpler answer. You didn’t shop around.
Like anything else in life, getting the cheapest, high-quality option is the ideal route. Thankfully, Compare.com makes shopping for car insurance and finding the best insurance pricing easier. With car insurance quotes from insurance providers like Progressive, Allstate, Geico, State Farm, and others, you can make sure you get the best rate possible.
Comparing quotes doesn’t cost anything, and you might uncover some huge savings! Just enter your ZIP code below and see how much you can save:
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