Why doesn't my insurance premium go down as my car gets older?

"If my car depreciates in value every year, shouldn't my insurance rate decrease every year? I feel like my policy gets more expensive every time it renews."

Answer
“The coverage that is affected by the value of your car is the comprehensive coverage and collision coverage. In most cases, you will see the rate of these individual coverages go down over time. The insurance carriers have to account for the cost of labor, which tends to stay the same or increase over time.
The liability portion of your policy is not connected to the age of your vehicle. The costs of bodily injury liability and property damage liability are based on:
  • the cost of healthcare in the area where you live
  • the likelihood of being in an accident
  • your past driving history
These are all factors that can cause the rate of your policy to increase even as your car gets older.
If you are unhappy with the price of your policy, download the free Jerry app to get instant quotes from over 45+ carriers. One of Jerry’s best features is they re-evaluate your policy every renewal to make sure the policy you have is the lowest option available.”
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Shannon Martin
Answered on Jul 28, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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