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10 Reasons Your Car Insurance Changes

Take a Look at 10 Different Reasons You May See Your Auto Insurance Rates Change!

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By: Alexis Karapiperis | Licensed Agent at Learnandserve.org | Powered by A Plus Insurance

What Is Car Insurance?

Car insurance it a type of insurance which provides financial protection against potential losses and damages related to owning and operating a motor vehicle. It is a legal requirement in almost all of the United States and other countries to maintain car insurance before driving on public roads.

When purchasing auto insurance, there will be different coverage options available, which can cause car insurance changes in the premium you will receive. However, some of the options listed may be mandatory to have on the policy depending on which State it is for.

Auto Insurance Coverages Will Include:

• Liability Coverage: This component covers bodily injury and property damage that you may cause to others in an accident where you are at fault. It helps pay for medical expenses, vehicle repairs, and legal costs if you are sued. Do keep in mind though, it will only cover up to the limits you have set on the policy. Any expenses that exceed those limits will need to be paid out of pocket.
• Uninsured / Underinsured Motorist Coverage: This provides protection if you are involved in an accident with a driver who has little or no insurance coverage. This will include any bodily injuries the insured or passengers experienced, but will not cover any damages that occurred to the vehicle. This coverage will also only pay up to the amount which are set on the policy.
• Personal Injury Protection (PIP) or Medical Payments Coverage: This covers medical expenses for you and your passengers if you are injured in an accident, regardless of fault or negligence.
• Collision Coverage: This covers the cost of repairing or replacing your own vehicle if it is damaged in a collision with another vehicle or object, regardless of who is at fault. A deductible will need to be paid first before this coverage will pay for any damages.
• Comprehensive Coverage: This covers damage to your car caused by incidents other than collisions, such as theft, vandalism, fire, natural disasters, and hitting animals on the road. A deductible will need to paid before this coverage will take effect.

Why Did My Car Insurance Go Up?

Almost all insured drivers are asking the question: “Why did my car insurance go up?”

There are many factors that have caused an increase in auto insurance rates across the country. According to the U.S. Bureau of Labor Statistics, car insurance rates have increased by 17% within the past year.

A few reasonings as to why can include: inflation, supply shortages, climate change and reinsurance rates.

A Few Reasons On Why Car Insurance Changes

In the chart above, there are 10 different reasons that you may see car insurance changes on your auto policy premium. All of these factors do play a role in calculating your grand total for auto insurance.

1.) How Your Age Factors Into Car Insurance

Age plays a factor when insurance carriers are determining your auto premiums. Typically younger / newer drivers will see an increased rate compared to older drivers. This is due simply to experience with driving. Insurance carriers will view the newer / younger drivers as less experienced on the road, making them more of a risk to insure due to the likelihood of being involved in an accident

2.) How Does Gender Affect Car Insurance Rates?

Unfortunately your gender can still determine your rates for auto insurance. Younger male driver insurance rates will normally be higher due to more careless driving. However, in more recent studies, women’s insurance rates have now become 0.4% higher than the men’s, even though statistics through the Insurance Institute of Highway Safety show that male drivers make up for 70.5% of driver deaths involving accidents.

Although, as you get older, you will see your rates go down, typically around 25 years old is when it will begin. By this age the carriers will view you as having more experience, so in return they will lower the rates as long as you maintain safe driving with no accidents or violations.

3.) How Does Marital Status Affect Car Insurance Changes?

Believe it or not, your marital status will play a role when determining the rates for your auto insurance as well. On average, married drivers will pay about $149 less each year on their car insurance. This is due to the fact that drivers who are married are seen as more financially stable and will tend to be safer drivers.

4.) Do Car Insurance Changes Happen With Different Zip Codes?

Where you live also factors into auto insurance rates. In certain States an cities you will see a variety of different rates. For example, when updating your address on your policy to your new / current address, you may see the rates either lower or increase. To further explain, insurance carriers will look at the total losses that occurred from the previous year to calculate their new premiums. If you moved from a rural area (where there was less car accidents), to the city (where there may be more accidents), the insurance company will raise the rates since that area has a higher probability of loss.

5.) How Your Credit History Affects Your Rates

Your credit score will partially determine your insurance score when it comes to the rates you may receive. This will help the insurance carriers to be able to cover more clients while promoting fair rates for others in similar categories.

6.) Why Is My Car Insurance Going Up After A Driving Infraction?

When your car insurance changes after a driving infraction, it’s because the driving infraction has likely caused you to be seen as a higher-risk driver in the eyes of the insurance company. Insurance companies use various factors to assess the level of risk associated with insuring an individual, and a driving infraction signals that you might be more likely to be involved in an accident or file a claim in the future.

Here are the reasons why your car insurance may increase after a driving infraction:

1. Increased Risk Perception: A driving infraction, such as a speeding ticket, running a red light, reckless driving, or other moving violations, shows that you have engaged in risky driving behavior. Insurance companies use these incidents as indicators of your driving habits and responsibility behind the wheel. As a result, they may consider you a higher-risk driver.
2. Higher Probability of Accidents: Engaging in unsafe driving practices increases the probability of getting into an accident. Insurance companies adjust premiums to account for the increased likelihood that they will have to pay out for claims resulting from accidents you may cause.
3. Statistical Data: Insurance companies analyze large sets of statistical data to assess risk and set premiums. This data often shows that drivers with past infractions are more likely to be involved in future accidents, leading to higher rates.
4. Loss of Good Driver Discounts: Many insurance companies offer discounts for drivers with a clean driving record. When you receive a driving infraction, you may lose these discounts, leading to an increase in your premium.
5. Policy Renewal: Your insurance premium is typically recalculated at the time of policy renewal. If the driving infraction occurred before your policy renewal, it will be factored into the new premium.
6. Underwriting Rules: Insurance companies have underwriting rules and guidelines that determine how driving infractions impact premiums. These rules can vary from one insurer to another.
7. State Regulations: Some states have laws that limit how long driving infractions can impact insurance rates. However, in many cases, driving infractions can affect your rates for several years.

It’s important to note that the impact of a driving infraction on your insurance premium can vary depending on the severity of the offense, your overall driving history, the insurance company’s policies, and state regulations. To avoid increases in your premium due to driving infractions, it’s best to practice safe driving habits and obey traffic laws at all times. Additionally, some insurance companies offer accident forgiveness programs or may reduce the impact of certain violations over time if you maintain a clean driving record.

7.) Yearly Mileage Usage

Depending on how many miles you put on your vehicle in a year will also determine your rates. Drivers who are more frequent on the roadways may pay a slightly higher amount due to them being more at risk to be involved in an accident, rather then the drivers who are not on public roads as often.

8.) Why Did My Car Insurance Go Up When Changing My Vehicle?

Whether you are starting a new auto insurance policy or adding / switching a vehicle on your current policy, you will see car insurance changes in the price. Some cars will be more expensive to insure due to the year, make, and model of the vehicle. Vehicle parts may also be more scarce or expensive which will factor into the increase in price as well. Always make sure to call you insurance carrier for a quote on how much it could be to add insurance onto a car!

9.) High Risk Violations

Having major violations on your driving record will cause car insurance changes that will increase your rates. Major violations can include, but are not limited to: DUI, Driving without insurance, and at-fault accidents. With some of these violations, an SR22 may be required by the court or the state. Each violation will remain on your record when determining rates for a different amount of time based on the violation.

10.) How Car Insurance Changes Based On Your States Requirements

Each State across the United States will have different requirements when it comes to their minimum amounts for insurance that they require drivers to hold. You may see car insurance changes on your policy as well when you move from one State to another.

How Can I Make Sure That My Car Insurance Rates Remain Low?

There are a few different ways to try to keep your rates low for auto insurance. We will list some ideas below to help you look for areas that you can try to save when it comes to car insurance changes.

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Last Updated on September 2, 2023 by Veronica Moss