Why Car Insurance Rates Increase

At the risk of sounding poetic, car insurance rates are like the seasons in that they are always changing. Some circumstances that cause insurance rate increases are manageable and can be helped, while others are out of your hands. Car insurance is based around the risk of the insured, and that is commonly what causes premiums to increase or be affected. This is another reason why cheap car insurance rates increase at times –it’s rare for at least two drivers to pay the exact same amount in car insurance premiums. In this post, we look at and explore the different factors that go into the ever-changing system that is car insurance rates. 

Your Car Insurance Rates Are The Way They Are Because of You

Let’s look at just how personal car insurance rates can be. Factors can range from driving ability, personal information, and even past car insurance history. Factors that are known to increase car insurance rates include the following:

  • Tickets for moving violations like speeding tickets
  • Car insurance claims from accidents 
  • Comprehensive car insurance claims
  • Zip Code and place of residence 
  • Car insurance score
  • Age 
  • Lapse in car insurance 
  • Discount loss

Speeding Tickets And Your Car Insurance Rates

A ticket you would get for speeding is an example of a moving violation. These are traffic violations that occur when the car is in motion. Nonmoving violations always have a chance of causing an accident, so that’s why your car insurance provider will increase your rates accordingly with your newfound risk, even if speeding is not a bad driving habit of yours. Even minor moving violations can be reflected in your new car insurance rates. Of course, with each new violation, the rates will continue to increase. While the increase isn’t vast in comparison to when a claim is filed, it’s still noticeable. So, while running that stop sign with no one around seems safe, it’s anything but for your wallet. 

Auto Accident Claims And Your Car Insurance Rates

Car insurance providers really prefer it if their policyholders don’t file many claims to the best of their ability. The true goal of insurance is to not use it. However, we have it for a reason, and sometimes an accident on the road occurs. Driver fault is a big part of determining which car insurance provider is the correct one to file the claim with. An at-fault driver would have a claim filed with their own car insurance provider, while the one that was hit by them is the one filing the claim. When it comes to car insurance rates, fault doesn’t matter. So, even car accidents that you didn’t cause may have an increasing effect on your rates. This, however, depends on the state as not all insurance companies practice this. 

Comprehensive Claims And Your Car Insurance Rates

What if your car was damaged or stolen while it was parked? While basic car insurance won’t cover the ensuing damages, full car insurance with comprehensive coverage will. Should your parked car be damaged by weather or criminal activity, you can file a comprehensive claim with your car insurance provider. While your stolen car can be replaced or located, your car insurance rates will increase to reflect the claim.

Where You Live And Your Car Insurance Rates

Piggybacking off the topic of criminal activity, your zip code is one of the factors a car insurance provider will use to gauge your risk. With your location and place of residence, they are able to look up local traffic, crime, and other factors that can affect your ability to drive safely. Every city has its own driving risks, and they are reflected in your car insurance rates. That being said, there is a chance that moving will affect your car insurance rates if you were to relocate to a more risky zip code. The inverse can happen if you move to a more rural area with not much traffic or crime. Always let your insurance provider know when you get a new zip code. 

Your Insurance Score And Your Car Insurance Rates

While some insurance companies look at people’s credit scores to gauge financial risk in insuring them, every one of them has a scoring system of their own in place. Your car insurance score, in this case, gauges how reliable you are when it comes to paying your premiums on time. Paying your bills on time is another big part of car insurance, and the provider will want to make sure that you are able to. 

Your Age And Your Car Insurance Rates

It’s common knowledge that teens and younger drivers under the age of 25 pay the most for car insurance because they are so new to the road. But did you know that car insurance rates also increase again when a driver turns 60? Senior drivers are seen with a similar level of risk to new drivers due to decreased reaction time. This isn’t exactly something that can be helped. 

Insurance Lapses And Your Car Insurance Rates

A car insurance lapse refers to whenever you are driving without coverage or not renewing your policy. Driving without car insurance is illegal and heavily frowned upon in the industry. Car insurance providers will still cover drivers with lapsed car insurance, but with increased rates. 

Discount Loss And Your Car Insurance Rates

If you were relying on a certain car insurance discount like a safe driving one to keep your car insurance rates at a comfortable level, this could come to an end if you were to get into an accident. There are several other discounts in the car insurance world; you should keep an eye on what discounts you no longer qualify for if an increase in your rates takes you by surprise. 

Handling Increased Car Insurance Rates

While some factors that determine your car insurance rates, like your age or residence, can’t really be helped, there are some that you can influence in your favor. Steering clear of accidents and practicing safe driving is the foremost way to decrease your car insurance rates. You can also make your premiums payments on time and set your deductible to a higher amount to get lower rates. You may not be able to change the risks around you, but you can change your personal risks.


Opinions expressed by The Chicago Journal contributors are their own.

Sidney Lewis

Sidney is a dance instructor and a freelancer. She loves physical fitness and writes about health and wellness. She loves working under the heat of the sun and loves also to travel.

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