The Most Common Reasons Your Car Insurance Rates Are Increasing
Find out if you’re getting ripped off on your car insurance in less than two minutes.
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You have a clean driving record, no accidents or other insurance claims, and your car insurance company gets in touch to say your premium is going up! What gives?
Unforeseen rate increases are very common, and are not always a reflection of your driving ability or claims history. Sometimes they are completely out of your control.
If your current insurance company is asking for more money, compare quotes with Jerry and see if we can help. We’ll show you the best rates from multiple insurance providers, all in one place. Our service is free and the average Jerry user saves $879 a year on car insurance.
You aren’t crazy, car insurance rates have been on the rise.
Why do car insurance rates keep going up?
You can expect a rate increase if you have to make a claim, especially if you are found to be at fault for the causal incident. However, if you have driven perfectly, and your rate has _still _gone up, the reasons are more complex.
Typically, a surprise rate increase suggests the insurance company has been paying out more in claims than it has been receiving in premiums.
For example, many insurance companies lost money when smartphones burst onto the scene, and led to more instances of distracted driving-related claims than insurers had anticipated.
Premiums also rise after bad storms, because they damage vehicles and result in expensive payouts. Or it might just be that the insurance company has been unlucky, and a high number of their customers have been involved in accidents.
Whatever the reason, some insurance companies attempt to offset losses by upping the cost of insurance across the board.
Things you can do to influence your car insurance rate
Insurance companies use complex algorithms to calculate your rate. These algorithms consider multiple risk factors, some of which you can control.
For example, as explained by Kelley Blue Book, drivers with clean driving records and no claims history represent a low risk to insurers, and are rewarded with the lowest rates.
Other things that can help lower your insurance premium are maintaining good credit, making all of your insurance payments on time, and driving one of the cheapest cars to insure.
Major life events can also influence your rate. Getting married, for example, often helps reduce your premium, as the statistics show single people get into more accidents.
On the flipside, things like adding a teenage driver to your policy will increase your rate, because inexperienced drivers are considered high risk.
Risk factors which are out of your control
It would be nice if you had full control over the risk factors assessed by insurance companies, but many are impossible to control.
For example, insurance companies consider younger and older drivers to be a higher risk, due to them having more accidents. If you have just crossed the threshold from middle-aged to old (sorry!), insurers might raise your premiums.
Where you live also has a huge impact on your car insurance rates. If your neighborhood has a high rate of theft, vandalism, accidents, or fraudulent claims, your premium will be high. It isn’t your fault, but you are paying for the relatively high chance of needing to make a claim.
How to find cheap car insurance
There are things you can do to get cheaper car insurance, like driving less, increasing your deductible, or removing coverages from your policy, but why compromise?
Different insurance providers charge different amounts for the same coverage. How do you know which company is offering you the best coverage for the lowest price? By comparison shopping, that’s how! You could save hundreds on your existing policy.
If you’d rather leave the hard work of gathering quotes to someone else, use Jerry. This free app can collect quotes from up to 45 top insurance companies in seconds!
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. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it one of the top insurance apps in the country.