The 5 Most Common Reasons Your Car Insurance Rate Increases
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There are many reasons a car insurance company might raise your premium, with the most common reason being a ticket or car accident.
Finding a low-cost car insurance policy lets you save a lot of money over time. Sometimes, though, your insurance company raises your premium, putting a dent in your pocketbook. The following are the five most common reasons why your car insurance could rise.
But there are ways to keep premiums down. The best way to do so is to try car insurance comparison and broker app Jerry, which searches results from over 50 top insurance providers to find the perfect package for you.
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How tickets and car accidents affect insurance
Your driving record, including any accidents, speeding tickets, or other moving violations such as speeding or running a red light, can wreak havoc on your car insurance premiums, causing them to go up. After such events, your insurance company could flag you as a risk, which leads to skyrocketing premiums.
If you were at-fault, a car accident will spike your premiums.
Most insurers look back three to five years for mild or moderate violations. More serious offenses, such as a DUI, driving 15 mph or more over the speed limit, and reckless driving, could haunt you for up to 10 years.
If you want to decrease your car insurance premium after a violation, consider taking an approved defensive driving course.
Driving more miles per year than you stated on your insurance application
The distance you drive on an annual basis is one of the criteria that car insurance companies use to determine your insurance premiums.
Car insurers such as Safeco, Travelers, and Metromile offer discounts to drivers who keep their mileage below a certain number per year. Discounts usually begin at 13,000 miles or less annually.
Other insurance companies such as Allstate, Progressive, and The Hartford implement usage-based rate plans. These plans require you to plug a telematics device into the diagnostic port of your car and record the number of miles you drive in a given amount of time.
If you drive more than you initially said you would on your insurance application, your carrier will raise your premium. The more you drive, the more likely it is that you are in an accident.
Buying or leasing a new car
Buying or leasing a new car can result in higher car insurance premiums. Lenders require you to carry a full coverage plan that includes comprehensive coverage on a new car to protect their investment. Other factors associated with buying or leasing a new car include the type of car and the features it comes with. Some other common factors that can increase the cost of car insurance include:
- Cars in high demand among car thieves, such as a Honda Civic and a Toyota Camry
- Cars lacking safety features, such as airbags, rear-view cameras, and crash-resistance systems
- Cars that attract more risky drivers, such as a sports car
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Adding a younger driver to your car insurance plan
While adding a driver does not always result in increased premiums, adding a younger teen driver will cause an increase in your car insurance premiums. This is because younger drivers are more likely to cause an accident. They simply don’t have the years of experience on the road that older drivers do.
Younger drivers do not start to get more favorable rates until they hit the age of 25, though some companies start offering lower rates to young women when they turn 21. Some other options to decrease costs for younger drivers on your policy include “good student discounts,” which usually offer a 10 to 15 percent decrease, and “safe driver discounts” for younger drivers who take an approved defensive driving course.
Your car insurance premiums usually go down as you age, reflecting the fact that as you mature, your driving habits get better. Once you turn 50, however, your car insurance premiums start to go back up.
While some statistics show that the safest drivers include those in the 64 to 69-year-old range, car insurance companies still raise rates on older drivers.
Luckily, drivers 55 and older can receive a discount on their car insurance for keeping a clean driving record or taking an approved defensive driving course, such as one offered by the AARP. The states that mandate these discounts include:
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Carolina
- West Virginia
- Washington, DC
Once you hit the age of 70, though, premiums tend to go up, and this gets even worse at the age of 80. Insurance companies that reportedly offer better car insurance rates for older drivers include The Hartford, Esurance, and Mercury.
How to get lower premiums
Finding more affordable car insurance is the best way to combat rising premiums. While many times you can’t control the reasons for a rate hike with your car insurance, you can opt for a more affordable offer from another company. So instead of asking, “Why does my car insurance keep going up?”, take action.
And remember, if you need help finding the best rate, try Jerry. If you want to save money on car insurance, the Jerry app is a good place to start. A licensed broker, Jerry does all the hard work of finding the cheapest quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price.
Is it normal for car insurance to go up every year?
Yes, it’s perfectly normal for car insurance to go up every year, even if you haven’t filed a claim. As insurance companies try to offset the costs of paying out claims, they may apply general increases in premiums to their customers.
If your premiums are slowly rising, you might find better rates with a new insurance company.
How can I stop my insurance from going up?
To stop your car insurance from going up so much, you can increase your deductibles. This means you will have to pay more if you are in an accident, but you also won’t have to pay as high of a premium.
You can also reduce coverage on older cars or cars you don’t use much. Having lower coverage means they won’t be as protected, but if they’re not being used much, they might not need as much coverage anyway.