Why Did My Car Insurance Go Up?

Everyone who drives needs car insurance. That’s why it’s so frustrating when you go to renew your car insurance and find out your bill has gone up. Sometimes you know why your bill went up, but other times it’s a mystery.

This article is designed to help you understand why your car insurance rates went up. We’ll list 10 factors can cause your car insurance to go up, explain what goes into setting car insurance prices, and go over some other things that can make the price of your insurance increase. Use the information in this article to get better control of your car insurance so you can make an informed decision about which company is right for you.

10 Things That Make Your Car Insurance Price Go Up

There are lots of different things that can your car insurance cost more. These are the 10 most common reasons the price of your insurance jumped between your current and last renewal.

6. Changing the payment or fee structure of your plan. For example, you’ll pay more overall if you pay month-to-month instead of paying for the whole term up front.
7. Change in medical conditions that make you more likely to file a claim.
8. New job – your profession influences the cost of your car insurance.
9. Canceling a home policy or other policy that produced a multi-policy discount.
10. Mistakes. Plain and simple. Insurance companies can make mistakes, especially when they’re doing something as complex as determining car insurance pricing. That’s why it’s always a good idea to check with your car insurance company to make sure you understand your bill and ask why there was a price increase.

Understanding How Car Insurance Companies Set Prices

The process of setting car insurance prices is very complex. This section is designed to help you understand what factors go into setting car insurance prices. You should use this information to try and get the best car insurance price possible.

Car insurance prices are based on a risk-reward system. The insurance company uses a variety of factors to determine how much of a risk they face in paying out a claim over your driving. They then use these risk factors to set your price. It’s important to remember that car insurance companies are businesses, and businesses need to make a profit. Therefore, the higher the risk the insurance company will need to pay out over your insurance policy, the higher the cost of that policy.

Once you’ve got that down, it gets easier to understand what kinds of things can influence your car insurance price. Anything that increases the risk you’ll generate a claim, or that increases the cost of any claim you generate, will make your car insurance costs increase. In the same way, anything that lowers the risk you need to make a claim or that lowers the cost of any claim you make will lower the price of insurance.

One easy example to understand is the type of car you drive. People that drive fast, expensive cars will pay more for car insurance. That’s because these cars cost more in repairs and replacement than other cars. Additionally, the speed of the car means that any claims are likely to cost more. Also, faster cars are statistically more likely to be in an accident.

That last point is also important. While many car insurance companies offer apps and programs that price your insurance based on how you drive, there’s no way for an insurance company to perfectly price out your risk. That means they use statistical information to help determine pricing.

For example, an 18-year-old could be the greatest driver in the world. But 18-year-olds are statistically more likely to be in an accident. Also, the accidents they’re in tend to have a higher associated cost. That means insurance will be expensive for the best driver in the world, simply because they’re 18.

This last example brings up an important point. There are two types factors that affect car insurance. External factors beyond your control and factors in your control. We’ll cover external factors first. These factors are things that most people have little to no control over.

External Factors that Affect Car Insurance Prices

External factors are things about a person, their situation, or the car insurance company that an individual doesn’t have a lot of control over.

Some of the biggest external factors include:

• Collisions, vandalism, or increased claims in your area. Car insurance companies use your address to help determine how likely it is you’ll make a claim. If there are more accidents or more claims in your area, then your costs will likely go up.

• Liability claims the insurance company paid out. It could just be a matter of bad luck, but sometimes an insurance company might wind up paying out more in claims than they were expecting. This goes for the entire population of their clients. Such a situation can result in everyone’s car insurance going up.
• More theft in your area. Most car insurance polices cover theft of your vehicle. There are several reasons someone may steal a car, from the car itself to the act of splitting it up for parts that can be resold. More car thefts mean higher premiums for you.
• A person’s age is a large factor in determining the cost of their car insurance. Generally, insurance will be cheaper for drivers in their 40-60’s, with inexperienced drivers and very old drivers seeing a rate increase.

Other Factors that Influence Car Insurance Costs

There are some factors that you can control when it comes to your car insurance costs. Some of the biggest factors that go into your car insurance price include:

• The cost of your car – higher value cars cost more to repair or replace. That means insurance companies will charge more to cover these cars. This is especially true for high-value, high-performance models.
• Your car’s safety features also play a role in the cost of your car insurance. More safety features means the insurance company is less likely to have medical bills to pay. It also means any medical bills won’t be as expensive as they could have been. That’s why things like air bags, anti-lock brakes, collision detection, and backup cameras can all lower the cost of your insurance.
• The performance your car can manage also affects the cost. Cars with a higher top-speed, better acceleration, and sharper turning are going to cost more than cars without these features. That’s because these features have a statistically significant relationship to the likelihood and cost of any accidents.
• Your driving history is a huge factor in the cost of your car insurance. In fact, most of the price of your car insurance is based around your driving history. The longer you go without a claim or any kind of traffic violation, the lower your insurance costs will be. That’s because a long, clean driving history shows the insurance company that you are a minimal risk for a payout. As a result, it’s important to always follow proper road rules and drive safely to ensure your insurance price is as low as possible. If you are looking for high risk auto insurance quotes because you do have a tarnished record just complete the form above and let companies compete for your business and offer the lowest price.
• Credit scores are another factor that gets priced in to the cost of your car insurance. Remember, insurance companies are in business to make a profit. Even if they don’t have to pay out any claims for you, they still need to collect payment. People with lower credit scores have a harder time paying their bills on time. This means that there’s a greater risk the insurance company won’t get paid. As a result, insurance premiums for people with lower credit scores are much more expensive than they are for those with higher credit scores.
• The type of car insurance you have also determines the cost of your insurance. The more comprehensive your coverage, the greater your insurance costs. Comprehensive coverage can include anything from theft and fire protection to policies that cover repairs from vandalism and hail damage. You can also get extras like rental car coverage while your car is getting repaired. Each of these additions increases the cost of your insurance.
• Financing is also an important factor. People that finance their cars are usually required to have comprehensive insurance. That way if there’s an accident that totals the car the financer is protected from a loss. As a result, people with financed cars will usually pay more for car insurance.

What Makes Car Insurance Prices Increase?

As discussed in the previous sections, there are lots of things that can make the price of your car insurance increase. The most important thing to think about when you’re trying to figure out why your car insurance went up is if there were any changes that make you seem like a greater risk to the car insurance company. Some of the biggest factors include things like:

If you go through all of these factors and still can’t determine why your car insurance costs went up, then it might be time to talk to the car insurance company. Even though the process of setting a car insurance price is complicated, you still have a right to know what you’re paying and why. Your price bump could even be an accident. That’s why you should make sure to call your car insurance company and ask them to go over the price of your policy with you. The next section will help you understand what questions to ask so that you can get the best understanding of your insurance price possible.

Things to Ask About if Your Car Insurance Price Goes Up

If your car insurance price goes up and you don’t understand why, then it’s important to get in touch with your company. After all, you work hard for your money, and you shouldn’t spend more of it on car insurance than is absolutely necessary.

The best way to get an understanding of your insurance cost is to have the insurance company go over every aspect of your insurance and why that aspect costs as much as it does. That way you can total up all the different parts of your insurance policy to arrive at the price you should be paying.

Every car insurance policy has multiple components to it. Some of the most common components are:

• Liability – how much you pay for things like bodily injury protection and property damage coverage.
• Collision – how much you pay for coverage from damage to other cars and/or damage to your own car
• Comprehensive – this category includes coverage for things like fire, theft, vandalism and similar things
• Endorsements – these are riders and additions to your coverage. It might include something like covering the cost of a rental car while your car is getting repaired. The more policy additions you have, the more insurance will cost you.

Picking the Right Car Insurance Company

Now that you understand all of the different reasons your car insurance price may have gone up, it’s important to understand what you can do about it to get car insurance rates that are more preferable. The internet has changed the way that car insurance buyers find and buy the insurance policies they need to drive legally. You can use online price comparison tools and reviews to help you determine which car insurance company is offering you the best price. Many insurance companies will offer a price match policy. That means you should always be shopping for car insurance even if you’re happy with your current car insurance company. Shopping around and finding a better price can mean that you get the coverage you need at a price you can afford.

FAQ

General Questions About Car Insurance Going Up

This section covers basic questions about why car insurance goes up.

Car Insurance Going Up and Accidents

We’ll answer common questions about car insurance going up and accidents in this section.

Car Insurance Going Up and Tickets

This section goes over popular questions about car insurance going up after tickets.

Car Insurance Going Up and Insurance Companies

We’ll answer questions about specific companies and car insurance going up in this section.

Car Insurance Going Up and New Cars

This section covers common questions about car insurance going up and new cars.

Car Insurance Going Up and New Drivers

We’ll answer questions about car insurance going up and new drivers in this section.

Other Reasons Car Insurance Prices Go Up

This section covers other reasons that car insurance goes up. Check here if you can’t find your question in one of our other sections.