rates are determined by several factors, such as your driving record, credit score, driver’s profile, coverage needs, deductible, and more. But if you’re not keen on paying rates through the roof, there are simple ways to save—like looking for discounts!
Car insurance rates are influenced by several factors depending on your state, such as your age, driving record, vehicle make and model, and coverage needs
A poor driving record with serious offenses will drastically increase your car insurance rates
There are several easy ways to save on your car insurance premium
Why is my car insurance so high?
If you’ve recently got a quote for car insurance and your jaw dropped at your rates, you’re not alone. Car insurance rates all over the country are high, but rates are also highly individual and influenced by personal factors.
Some of the most common reasons for expensive insurance rates include the following:
Age or driving experience, depending on your state
Vehicle make and model
Any factors that insurers think will increase your risk of filing a claim will likely increase your insurance premium. But you also have to factor in things you can’t control, like weather, inflation, healthcare costs, economic trends, and more.
So, while you can control the cost of your insurance to some degree by brushing up on your driving habits and keeping a
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What increases auto insurance rates?
No one wants to spend their entire paycheck on their car insurance policy, and if you’re confused as to why insurance rates are so high, it’s important to understand what insurers look at to determine your premium. That way, you can take the necessary steps to lower your premium and boost your savings!
Here are some factors that cause car insurance rates to increase.
Poor driving record
At-fault accidents, traffic tickets, or serious violations like reckless driving or a
can skyrocket your insurance rate compared to drivers with a clean driving record and good driving habits. For example, a driver with a DUI on their record will pay more than double the insurance rate of a driver with a clean driving history and minimum coverage. In some situations, you may even need to find an insurer specializing in
(although these coverages are required in some states). That’s also why shopping around and comparing auto policy prices with the same coverage is important if you want to find the lowest rates.
Higher-risk driver profile
Every insurer uses its own set of qualifications to determine whether policyholders are high-risk, but there are specific reasons—most of these are standard between providers—that might put you in the high-risk driver category. These include:
You’re a young driver (under 25) or senior (over 70)
You’ve been involved in a serious accident
You have had a DUI
You have major traffic violations on your record (reckless driving,
on your policy, your deductible amount will influence your monthly car insurance payments. Your deductible is the amount you’re responsible for paying towards your claim before your insurer will pay out the remainder.
For example, if you submit a claim for $5,000 in repairs and your deductible is $1,000, your insurer will pay you $4,000. A higher deductible decreases your insurance rates, but the payout will be less if you have an accident. Deductibles are only applicable to collision and comprehensive policies.
Most people don’t think about their credit score when buying car insurance, but building your credit and paying your credit card bills on time can go a long way to keeping your insurance rates low. Depending on your state, the insurer may look at your credit score when determining your insurance rate. For example, a 35-year-old with a poor credit score can pay up to 70% more for a full-coverage policy than an equivalent driver with a good credit score.
The factors we’ve mentioned aren’t the only factors influencing car insurance rates. Depending on your state, premiums can also be based on:
Vehicle make and model
How much coverage you are required to have for financing or leasing your vehicle will increase the overall cost of your insurance. On top of that, you also have to factor in state-specific influences like weather patterns, crime rates,
If you’re looking to save on your car insurance, shopping around is the easiest place to start. Not every insurer emphasizes the same factors, so one insurer may offer higher rates than the quote for identical coverage from another insurer. Because there can be such a big discrepancy between companies, shopping around and comparing car insurance quotes from at least three providers is the easiest way to save money and find the lowest rate.
Look for discounts
Most car insurance companies offer various discounts to entice customers to buy from their company—and it works. If you fulfill their requirements, insurers may offer you one or more discounts to help lower your annual premiums. Here are some examples of discounts offered by various providers:
Keeping a clean driving record is another easy way to avoid high car insurance rates. Traffic or speeding tickets, other infractions, and collisions negatively affect your insurance rates, and multiple violations mean you’ll be spending more on insurance than someone without any violations. If you maintain a clean driving record, you may also qualify for a
Many insurers also use telematics technology to monitor driving behaviors, so the safer you drive, the less you pay for insurance. If you think you’re a safe driver, signing up for a usage-based insurance program might help reduce high rates. But beware—bad driving habits can lead to surcharges and rate increases with some companies!
Brush up on your driving skill
Enrolling in a defensive driving course not only helps you brush up on your driving skills but can also help lower your insurance rates because many insurers reward safe driving habits. But before you sign up for any course, ensure it meets your insurer’s or state's regulations.
Bundle your policies
If you have multiple insurance policies—auto, homeowners, renters, motorcycle—bundling them with the same insurer could help reduce your rates. Most insurance providers offer reasonable discounts for policyholders who bundle their services, which can sometimes help you save as much as 25%! On top of that, you’ll also only be dealing with a single provider, one renewal process, and potentially only a single deductible.
The easiest way to lower the cost of car insurance is to shop around. Different insurers will offer different rates for the same coverage, so shop and compare to find what’s best for you. Some other ways to lower your car insurance rates include driving carefully, increasing your deductible, and maintaining a good credit score.
Why do car insurance premiums go up for no reason?
In most cases, you won’t see auto insurance rate increases for no reason, but that doesn’t mean they can’t. Even good drivers maintaining a clean driving record can see prices increase upon renewal. This is generally due to influences like your zip code or economic reasons that increase costs for insurers.
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