There are many reasons your car insurance can go up. If your auto insurance premium went up at renewal time, it may be because you caused an accident, earned a ticket, switched cars, added a teenage driver to your policy or increased your coverage. Even moving a short distance or paying a few credit card bills late can raise your car insurance cost. Your rate may also have been affected by widespread changes beyond your control—in economics, weather, crime and accident statistics, vehicle technology, new laws, medical costs, or your insurer’s profit margin.
Top 10 Reasons Your Car Insurance Can Go Up:
1. You increased your riskiness, in the eyes of your insurance company
This happens when you cause an accident, get a ticket for a moving violation, or add a riskier driver like a teenager to your policy.
2. You increased your coverage
Maybe you realized you didn’t have enough protection for your peace of mind, in case of an accident. Higher limits or lower deductibles equal higher premiums.
3. You changed cars
Perhaps you traded an older model for a newer one that raised your rate for collision and comprehensive insurance. Rates will also rise if you trade a safe, practical vehicle for something more expensive, faster, or with special modifications.
4. You moved
If you move into a zone with more population density, a higher theft rate or more insurance claims, your rates can rise. Moving a few blocks can cost as much as 64%, according to some studies. Moving from a small town to a metropolitan area can cost much more—from 300% to 800%.
5. Your credit score fell
Most insurers use credit history in setting rates. If your rating falls from excellent to poor, your premium could as much as double in some states.
6. The economy is stronger
This is a good thing except when it comes to insurance costs. More people working means more drivers on the road, going more places. This raises risk and rates across the country.
7. Medical costs are rising
From 2012 to 2017, bodily injury liability claims increased in cost by 10% per year.
8. Repair costs are rising
Prices for motor vehicle repairs were 61% higher in 2017 than they were in 2000, according to the U.S. Bureau of Labor Statistics. New safety features, with their many sensors and computer chips, are expensive to fix.
9. Cell phones are distracting
At least nine Americans die and 100 are injured in distracted driving crashes every day, according to the National Safety Council. And 1 in 4 car accidents in the U.S. is now caused by texting and driving. Accident rates due to distracted driving are increasing year by year.
10. Marijuana is being legalized in more states
Accidents rose up to 6% in states with legalized recreational marijuana between 2012 and 2017, compared to neighboring states where it remained illegal, according to the Insurance Institute for Highway Safety.
Many of these issues affect your rates because they affect the bottom line of your insurance company. When your insurer isn’t making enough money to cover the cost of claims, they have to raise prices. However, the effects aren’t equal on all insurers. If your car insurance has gone up, it’s important to comparison shop for a company that can offer you the lowest rates.
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