Top Reasons Why Your Auto Insurance Increases

Why Did My Auto Insurance Rates Increase?

Auto insurance is a true Catch-22 situation. After all, no one enjoys forking over money only to have it disappear each month, but the thought of being uninsured when you really need it is even worse. And, while car insurance is already costly, many of us see our rates rise over time, even if we're good drivers with a spotless record and no claims history.

If you're wondering why your car insurance rate has suddenly increased? There are numerous factors that can lead to an increase in the cost of a car insurance policy. Stay with us as we investigate how they may have influenced your premium—even if you haven't filed a single claim. Here are a few possible reasons for an increase in your car insurance rates:

Traffic Violations
Car Type
History of Insurance Claims
Coverage Gaps in Automobiles
Personal Credit Report
Present Location

Below, we'll go over each of these factors that can cause your car insurance rates to rise, as well as why they do so.

A Spotty Driving Record

An insurance agent, like your last blind date, will want to know everything about your past—when it comes to your driving record, that is. The more traffic violations you have, the higher your insurance premium will be. When it comes to violations, there are two types that can have an impact on your premium, including minor and major traffic violations, which are listed below:

Minor Traffic Violations

Speeding
Unlawful parking
Inability to stop or yield
Failure to stop at a red light
Overburdening a vehicle
Too close to the chase
Incorrect passing

Major Traffic Violations

Dangerous driving

Container that is open

Driving in the wrong direction

Driving while your license is suspended

Driving while intoxicated

Fleeing from police

Your Car Type Can Increase Insurance Rates

Which car would you rather take for a joy ride down an open road with no speed limits, a brand-new Porsche 911 or a Volkswagen station wagon?

You're thinking like an insurance agent if you chose the Porsche. They understand the allure of a supercharged speedster. These types of vehicles make it easy to put the pedal to the metal, which increases the likelihood of an accident.

It is not only the smaller, sportier vehicles that command a higher premium. High-end luxury vehicles are also more expensive to repair or replace, resulting in an increase in monthly payments. Insurance companies will also be on the lookout for vehicles that are frequently stolen. The make and model vary by state, but Honda Civics and Ford pickups are among the most sought-after vehicles by car thieves—and their drivers bear the financial consequences.

Your Car Insurance Claim History

If you were at fault in a car accident and the other driver filed a claim, the resulting payout will affect your rate. “But what about minor accidents, such as a fender bender?” you may ask. Fortunately, some insurance companies provide a buffer that allows you to receive a small payout—usually less than $500—without having to pay a higher monthly premium.

Nonetheless, almost every auto insurance company will raise your insurance premium after an accident, and you will pay more for accidents that were your fault. These amounts vary by company, so you should speak with your provider to find out what they charge before you get a surprise bill.

A Lapse in Your Auto Coverage

A lapse in car insurance means that your vehicle is registered but uninsured. Assume you missed a monthly payment or forgot to renew your policy after it expired. Both are simple errors, but they both count as a lapse in insurance, even if the lapse is only for one day. If your lapse is less than two weeks, some insurance companies may not penalize you. Others, however, may raise your rates—and for good reason. This is because if you have a lapse in your car insurance, you pose a higher risk to insurers if you are involved in an accident.

So, how much of a hike should you anticipate on your bill? According to studies, drivers who had a coverage lapse of 30 days or less saw an 8 percent increase in their average car insurance rates. Drivers who went without insurance for more than a month, on the other hand, saw a 35% increase. What is the takeaway here? The longer you wait to renew your policy, the higher your rate will be.

Your Credit History

Do you have a bad credit history? Perhaps your score has recently dropped? Insurance companies will also be interested in your credit history, including any debts, bills, tax liens, and personal judgments. This is due to the fact that they rate their policies using ‘insurance scores.'

The insurance score is a number that reflects your credit and, according to insurance companies, predicts how dangerous you are behind the wheel. These insurers are unconcerned about the amount of debt you've accumulated or who you've owed it to. Instead, they're looking for a pattern of delinquency, whether it's unpaid taxes, bills that have piled up, or liens that have been filed against you. The bottom line is that insurance companies want to minimize their risk, so if you have no credit history or if your credit is in poor standing, they will charge you more.

Your Location Also Increase Auto Policy Rates

It may appear unfair, but many insurance premiums are determined by where you live. A variety of factors are taken into account, including weather patterns, demographics, and even the history of accidents in the area.

Michigan, for example, has the highest insurance rates in the country due to its no-fault personal injury system, which provides injured motorists with unlimited lifetime medical benefits. In addition, the Great Lakes State has more uninsured drivers than the national average, raising the costs for everyone else. Depending on the laws and statistics on driver behavior, someone in one state may pay nearly double what someone in another state pays, as is the case in Montana and Idaho. Here you can compare auto insurance rates by state.

The Most Comprehensive and Affordable Auto Insurance

As you can see, your monthly insurance rate is affected by much more than a claim history. Fortunately, once you understand what is causing these increases, you can find a provider who will provide you with the best rates possible. And, with our quick and affordable online auto insurance quotes, we're here to make the search for auto coverage easier than ever. Get your quote today and discover how much money you can save each month!