One of the biggest complaints that many people have with their car insurance company is that they experienced a rate increase upon renewal of insurance. Car insurance rates can go up for a number of reasons. Two of the most common reasons that you may experience a rate increase are that you received a moving violation or were in an at-fault accident. These rate increases are to be expected with most auto insurance companies. However, there are also several reasons that your car insurance rate may increase that you may not be aware of. Here are some reasons why your car insurance rates may go up:
- In An At Fault Accident
- Got a Speeding Ticket
- Filed a Claim
- Moved to a New Zipcode
- Changed Your Auto Insurance Policy
- Changed Your Payment Plan
- Rate Increases outside of Your Control
You Were In An At-Fault Accident
When you first apply for insurance, insurance companies typically look at your driving history. If you have a clean driving record, you will pay less in insurance premiums. However, if you get into an at-fault accident, you will likely see an average increase of 30 – 40% in your rates. You should shop around for insurance in the event that you do get in an accident for insurance providers who provide the best rate for drivers with an at-fault accident.
You Had a Moving Violation
If you receive a moving violation such as a speeding ticket, you can expect to see a 20 – 30% increase in your car insurance. This is because the insurance company associates speeding with a higher risk for a driver getting in an accident. Similarly, you should shop around for a provider that offers the best rates if you do receive a speeding ticket.
You Filed a Claim
In addition to a moving violation or an at fault accident, filing a claim with your auto insurance is one of the most common reasons for an auto insurance rate increase. Filing a claim with your insurance company, even if you are not at fault, tends to cause your auto insurance rate to increase. Therefore, if your car suffers minor damage which you are able to pay for out of pocket, most insurance agents recommend paying for it yourself before filing a claim with your auto insurance company.
You Moved to a Different Zipcode
One of the most important factors aside from your driving history and vehicle that determines your auto insurance rate is the zipcode you live in. There can be major differences, all other factors held constant, between one zipcode and another in the same city due to factors including density of traffic, crime rates, and accident rates. A zipcode that has higher accident rate or crime rate will result in a higher insurance premium because of the higher risk associated with something happening to the vehicle. Therefore, if you have move recently and updated the address on file, this could be a reason why your rates have gone up.
You Have Changed your Auto Insurance Policy In Some Way
Your rates can increase if you have made changes to your policy including adding a new driver or car. Moreover, if you have homeowners insurance or another type of insurance with your auto insurance company, dropping this coverage or switching it to a different company can cause you to lose your bundling discount which can cause your car insurance rate to increase.
You Changed Your Payment Plan
Oftentimes, the auto insurance companies charge you less if you pay your rate upfront. Many auto insurance companies have a discount for upfront payment as well. Thus, switching to monthly billing can cause you to pay a slightly higher rate.
Rate Increases Outside Of Your Control
Even if you none of the reasons above apply, insurance companies can and do increase premiums. These reasons are typically out of your control and could include an increase due to a rise in insurance fraud, an increase due to increased medical costs, an increase in accident rates where you live in or a change to the safety profile of the vehicle you drive.
Final Thoughts
A number of factors are used to determine your car insurance rate. When these factors change, your auto insurance rate may increase. In addition to your driving record, factors such as whether you have filed a recent claim, relocated, added a person or car to your policy, or changed your payment plan. In addition to these changes, changes in such factors as marital status, age, and credit score may cause unexpected rate increases as well. Circumstances outside of your control could also cause an increase in rates, so your best bet as a consumer is to be prepared to shop around for better rates.