7 Real Reasons Your Car Insurance Has Increased (And How You Can Decrease It)

Does your insurance renewal bill look a little higher this time? You’re not alone. Every year in the United States, motorists have to pay higher insurance premiums – sometimes for obvious reasons (e.g. speeding tickets) and sometimes for no apparent reason.

Luckily, there is actually a way to break the madness behind car insurance costs. We’re going to talk about how car insurance works and why the cost of your car policy could suddenly increase.

So whether your renewal notice just went up a few bucks or suddenly seems unusually high, these are eight of the most common reasons you might be seeing that increase — and what you can do to save money on car insurance.

There are many reasons why your car insurance could increase every year. Because auto insurance companies use a variety of risk assessment information, your payments can increase even if your driving records remain spotless. Here are eight of the most common (but sometimes unexpected) reasons why your car insurance could go up.

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1. You have moved

It may sound strange, but moving is a common reason for a price increase. Because insurance companies typically calculate premiums based on zip code, you may end up paying more (or less) after a big move.

Rates for postal codes are calculated based on risk. Above all, the risk of an accident or vandalism is assessed, which is why people in big cities usually pay more for car insurance than drivers on the outskirts.

If the proximity to the workplace has changed due to a move, this could also be a reason for the premium increase. Driving longer commutes is considered a higher risk by insurance companies, and they increase your premiums to cover that risk.

But moving isn’t just a risk factor in terms of increased traffic or potential burglaries. It can also simply be a matter of local laws and the quality of the roads in your new neighborhood.

For example, the state of Louisiana has consistently been ranked as one of the most expensive states for auto insurance. Far from being an overly dangerous place to live, this state is known for its poor road conditions and overwhelming number of court cases. All of this leads to insurance agencies requiring residents to pay more for their auto insurance policies.

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2. Your credit rating has gone down

Credit scores matter in unexpected ways. Not only are they used by big banks to determine your eligibility for a loan; They are also used by auto insurance companies to predict the likelihood that you will make a claim. And while you’ve probably heard that some insurance companies “don’t look at your credit score,” they do — they just call it something else.

By analyzing selected information from your credit reports, insurance companies assess what is known as your credit-based insurance score. The reasoning? Research has shown that people with higher credit scores are less likely to have accidents or make insurance claims than people with lower credit scores.

Regardless of what it’s called, auto insurance companies check your credit score, and if it goes down, you might pay more for what your auto insurance covers. On the other hand, if you improve your credit score, you can also improve your auto insurance rate.

3. Speed ​​limits have been increased

Have you noticed higher speed limits on your commute? This could be another reason for increasing your car insurance costs. Unfortunately, when states increase their speed limits, it can mean more road accidents.

If you live in a place that recently increased its speed limits, you should expect to pay more for automatic coverage on your next policy renewal.

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4. Your state has legalized cannabis

While not enough time has passed to determine whether legalizing marijuana actually leads to more car accidents, a study of some of the first states to legalize has shown a possible link.

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The bottom line? This could easily lead to higher insurance costs for drivers in places where marijuana has been legalized. If you live in (or recently relocated to) a state with legal cannabis use, you may be paying more for auto insurance.

5. Other environmental risk factors have increased

Auto insurance premiums can increase for a variety of reasons, not just when your state legalizes cannabis or decides to increase speed limits.

Other environmental risk factors that can cause your insurance company to charge higher fees are things like an increase in the number of uninsured drivers, more extreme weather events, more accidents caused by distracted drivers, or even an increase in local crime rates.

Any number of factors, or a combination of risk factors, can cause insurance companies to charge higher fees, particularly if those risk factors result in higher claims for damages.

6. Medical and repair costs have increased

Another unpredictable reason why your insurance could go up? When repairs and medical expenses become more expensive. The more insurance companies have to pay to cover property repairs and medical expenses, the more they charge you for coverage.

If costs have increased in these industries recently, those expenses will quickly trickle down to your levels in the form of higher coverage rates.

7. You were in an accident or received a speeding ticket

Along with all the unexpected reasons that car insurance can go up, there are also the obvious ones – like getting a parking ticket, getting caught for a traffic violation, or being involved in an accident that’s deemed your fault.

A DUI is another quick way to end up paying a lot more for insurance coverage or even losing all of your insurance coverage as you would be considered high risk from the insurer’s perspective. Violations of the law committed by a driver while driving is another reason you may see your insurance bill increase.

The best way to avoid such increases is to keep a secure driving log. Another good reason to keep your driving record spotless? Over time, being considered a safe driver could actually become a factor in when your car insurance rate starts to go down.

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How to save money on car insurance

Saving on car insurance may sound complicated, but it isn’t. Assuming you have a secure driver’s license, comparison shopping is a great way to get the best car insurance rate. Start your search online and compare multiple car insurance quotes for the same coverage from different providers. This should give you an idea of ​​what you actually have to pay for the coverage you want.

Even if you don’t end up switching insurance providers, you can save even more of your paycheck with your current provider by changing your plan a bit. This may mean choosing a higher car insurance deductible, or even dropping additional coverages you don’t need, such as insurance. B. comprehensive insurance for an older car. If you’re happy with your current provider, give them a call and talk to them about how you can save money on car insurance by changing a few details in your policy.

Another great way to save on insurance coverage is to bundle different types of insurance coverage with the same provider. If you have other types of insurance, such as You can actually save quite a bit of money by buying them all from the same provider.

bottom line

It’s normal for car insurance to go up, but that doesn’t mean you have to pay for it. Depending on why your rates have increased, you may have the opportunity to look at insurance quotes for a new policy, either with your existing provider or with a new provider.

Familiarizing yourself with these common reasons for insurance increases can help you make the best decision when it comes to the cost of your car insurance.

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This article 7 real reasons why your car insurance is up (and how to down it) originally appeared on FinanceBuzz.

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