Things that can Affect Your Existing Auto Insurance Rate

January 25, 2021

Every driver experiences it. Your auto insurance bill increases even after a year of good. You throw your hands up in the air and claim that you are going to shop around. Yet you probably never get to it, right? You aren’t alone.

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So why do auto insurance rates keep going up even if you have a good driving record? Circumstances outside of our control sometimes take effect. Learn the top reasons your auto insurance may keep going up and what you may be able to do about it.

Reasons Auto Insurance Rates Increase That Aren’t Your Fault

Car insurance rates increase across the board for the following reasons:

  • Increase in accidents – If your area as a whole has seen an increase in accidents, every insurance company’s liability increases. This can cause rates to go up for everyone, not just you. The insurance company needs to protect themselves in the event that you are involved in one of the increased number of car accidents in your area.
  • Increased repair costs – As the cost of materials and labor increases, insurance companies need to cover their costs. If it costs them more to repair cars, they have to charge more for the premiums.
  • More people on the road – As the economy continues to improve, more people buy cars and drive more. This puts everyone at higher risk for an accident. Insurance companies need to protect themselves against the odds of an accident. They do this by increasing premiums across the board.
  • Weird weather – If you’ve had unique weather for the area you live, insurance rates may rise. If there’s been an influx of floods, hurricanes, or hail, insurance companies may see a larger number of claims. In an effort to offset those claims, they need to increase the premiums of every driver, not just the affected ones.
  • Increased speed limits – If the county or city recently increased the speed limits in your area, it could increase the risk of accidents. Insurance companies often increase their premiums to protect themselves from this as a result.

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Reasons Auto Insurance Rates Increase That are Your Fault

Car insurance rates also increase as a result of your own actions. These increases wouldn’t be across the board. Instead, they affect your insurance premiums individually:

  • Accidents or claims – Once you have an accident or make a claim on your insurance, you become a risk to the insurance company. Even if the accident wasn’t your fault, you may have higher premiums to make up for the risk of it happening again.
  • Poor driving choices – If you get busted with a DUI or reckless driving, you pose a serious risk to insurance companies. The depth of what could go wrong in either of these cases is huge. Insurance companies increase premiums to make up for the risk that you pose.
  • Adding a driver – Any time that you add a driver to your insurance policy, it changes the dynamic of your policy. This is especially true if you add a teenage driver to your policy. Teenagers can cause your premiums to double because of the high risk that they pose.
  • Moving – If you changed locations, your insurance may increase as a result. Insurance companies base the premiums on the riskiness of the area. If you move from a safe area to an area of high crime, for example, you can expect your premiums to increase.

Miscellaneous Reasons for Increase Insurance Rates

Sometimes, insurance rates increase for other reasons that you may not even realize:

  • Losing your bundled rate – If you had home and car insurance with the same agent, but then you pull your house insurance, you may lose your discount.
  • Buying a new car – Before you buy a car, find out the insurance rate for it. Insurance companies rate the premiums based on the safety of the car, its chances to be stolen, and the cost to repair it. If you buy a hard to insure car, you may pay much higher premiums.

Sometimes insurance companies just have a general increase across the board. The only way that you can get around it is to shop around. We recommend that you shop car insurance at least once a year to make sure that you are getting the best deal. Sometimes staying with the same company works against you because they don’t have to fight for your loyalty. They don’t have a reason to discount your premiums. If you shop around, though, companies may fight harder to keep your business.

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