Getting a good rate on car insurance can be really tricky. You have to fill out a bunch of online forms to get a quote. Then you need to compare all the plans and their coverage. By the time you finally choose a plan, you never want to think about your car insurance rates again.
So, there’s nothing worse than when you log in to pay your bill only to find out that your car insurance rate has gone up. If you’re angrily asking yourself, “Why did my car insurance go up?” here are some possible answers.
1. You Were in an Accident
The most obvious and common reason that your car insurance goes up is that you were in an accident. Even if you weren’t at fault in the accident, your car insurance rates will go up. Yes, even if you were rear-ended or hit a deer you couldn’t possibly avoid, your car insurance rate will go up.
Why? Because the car insurance company had to cover the costs of your claim. Yes, that’s what your regular monthly premium is for, but when you have an accident it means the insurance company has to pay for repairs, which may cost more than what your current rate covers.
Some insurance companies also consider you a more high-risk driver after an accident, even if the accident wasn’t your fault. So, they charge you more preemptively in case you get into another accident.
2. You’ve Gotten Some Tickets
Did you know that the speeding ticket you got while racing to make that meeting at work can impact your car insurance rate? Well, it can. So, take that incentive to slow down and follow the speed limit.
Not all traffic tickets will impact your car insurance rate. Parking tickets and tickets for a broken headlight or taillight usually won’t impact your insurance premium. The tickets that result from poor driving choices will.
Speeding tickets that you get for going significantly over the speed limit can raise your rates. Tickets for reckless driving or swerving can also raise your rates. If you’re ever caught driving under the influence your rates will also go up.
So, if you don’t want your insurance rates to go up, make sure that you’re always being a safe driver. Find out more about being considered a high-risk driver.
3. Your Credit Score Went Down
Your credit score impacts all sorts of financial things like whether you can get approved for a credit card or a loan, your student loan rates, and, believe it or not, your car insurance rates.
A big factor in your credit score is whether or not you’re paying your bills in a timely and consistent way. If you miss payments or your payments are regularly late, your credit score goes down. Many companies use your credit score to indicate whether you’re likely to pay your bills on time.
So, if your credit score drops, your car insurance company may decide that you’re less likely to pay your bill on time or at all. This makes you a higher-risk customer. That may cause them to increase your rates.
4. The Risk Factor of Your Hometown Changed
One factor that goes into determining your credit score is where you live. Some places are considered to be more high-risk than others. For example, people who live in cities usually pay more for car insurance than people in rural areas. This is because accidents are more likely in the city than they are in rural areas.
Insurance companies decide how high-risk your hometown is using several factors like traffic, the number of yearly accidents, population density, and crime rate. If any of these factors drastically change in your city – say the crime rate goes way up – your insurance company may raise your monthly premium. Your hometown became more high-risk, so, unfortunately, you have to pay more.
This is one of the factors that’s out of your control, but it’s good to know that it happens.
5. You Moved
Since where you live impacts your car insurance rate, it makes sense that your rate may go up if you move. This is especially true if you move to a different state or to from a small town to a large city.
When you’re preparing for your move, it makes sense to research the car insurance rates in the city so you’re prepared for the additional expense.
6. You Changed Jobs
Sometimes a job change can also impact your car insurance rate. In most cases, you’ll know whether changing your job will impact your car insurance rate. Obviously, if you got a discount on car insurance through your job, you’ll lose that discount when you leave your job.
If your new job requires you to use your car for business purposes, this can change your insurance rates as well. The mileage from home to your new job may also cause changes to your rates if your commute is significantly higher.
In a few cases, your new job may make you more high-risk for car accidents, which can change your rates as well.
7. You Have a New Diagnosis
In some rare cases, a new medical diagnosis can impact your car insurance rate. The only reason this would happen is if your new diagnosis could impact your ability to drive. For example, if you’re diagnosed with certain types of epilepsy this can make you a much more high-risk driver.
These cases are few and far between, but if your medical status changes significantly, you might want to check in with your car insurance provider.
Still Wondering Why Did My Car Insurance Go Up?
These are the most common answers to the question, “Why did my car insurance go up?” However, these aren’t all the reasons why your car insurance rate may have increased. There are several less common reasons why your car insurance rates may suddenly rise.