Written by Why Auto Insurance Premiums Go Up
I’m sure if your premium has risen you’re asking yourself this very question. “Why did my auto insurance just go up?”…alright, let’s look at a few of the major factors that may have been the reason. Keep in mind, sometimes rising insurance rates really have nothing to do with you – in fact, auto insurance fraud or major losses to an insurance company will often be passed on to you the consumer.
Reasons Your Auto Insurance Rate Went Up
- Your Driving Record: Seems fairly straightforward right? If your car insurance all of a sudden jumps (after the next 6 month policy renewal) and you’ve had a speeding ticket, car accident, or other ticketed moving violation – this is likely the culprit. Driving safely is key to avoiding premium increases due to your driving record.
- Adding a Teen to Your Auto Insurance Policy: I wrote an article on this here – Adding a Teen Driver. To paraphrase the article, adding a younger driver to your auto insurance policy will often warrant a large increase in your insurance premium. Read the article to find out how to minimize the increase.
- Vehicle Location: If you’ve moved a few times over the last few years you probably already noticed how much a zip code can make a difference. Increases vary by risk factor (yours and the zip code), but don’t expect to necessarily save money if you move to a seemingly rural area, remember it’s all about statistics so it makes sense to see if moving to that nice condo downtown will cost you less, or that great little suburb 15 minutes from the city will cost you more.
- Your Age: This is another one of those variables I keep talking about, age/driving record/location/sex – it’s all included in calculating your personal risk and inherently, your premium. If you’re under 25, you’re probably seeing a considerably high premium but dropping little by little each year. If you’re over 65 you may see a small increase each year. Of course location still counts here as do the other variables.
- Adding Your Spouse or Another Driver to Your Policy: It’s not just teens that can increase your rate. Any driver that lives in your home or has access to your vehicle(s) will be either listed on your policy or designated as “named driver exclusion”. In another article I will go on more about what that means, but essentially – either you pay to have the driver(s) listed on the policy and subsequently see the premium increase or you agree in writing not to allow them access to your car and if so, no damages will be covered. However, if your wife or mother, or anyone needs to have access to these vehicles they will also be required to be on your auto insurance policy and your premium will reflect the added drivers.
What Can I Do If My Car Insurance Rate Goes Up?
Often there isn’t much you can do to lower your premium and keep your policy exactly the same (i.e. same zip, drivers, and automobiles), however, this is only for that EXACT policy with that company. If you’re determined to lower your auto insurance bill here are a few things you can do.
- Shop Around: Didn’t think you could leave your insurance company that easy did you? Well, you can. You may find out that other companies can offer a lower rate and there’s only one way to do that and that’s by getting a free quote. There are many articles on this site related to getting a free quote as well as plenty of links that will take you right to a quote application we recommend SafeAutoInsuranceQuote.Com. Don’t ever hesitate to check around for the best rate from multiple companies, even if you’re right in the middle of a 6 month policy, it’s still smart to see if you can save money.
- Check Your Deductible: is your deductible $500 or $1,000? If you have a leased or purchased vehicle (i.e. a vehicle with a lien from a lender) then you’re going to need at least $500 as a deductible (please check with your insurance agent on state insurance requirements), but, if you’re deductible is already $500 and you feel that you can afford a $1,000 deductible you will often see a savings of some kind. Keep in mind a deductible is the price you must pay before your insurance policy covers any damage.
- Drop Drivers From Your Auto Insurance Policy: Sounds harsh I know, but hear me out. Let’s say that you have a really nice sports car, a family car, and another car for you use as a daily driver. If your spouse has a bad driving record and you have a clean driving record you may want to open another policy with a different company for the cars you will only drive yourself. It’s not as complex as it sounds. If your spouse doesn’t drive the sports car, there’s no sense covering them on it right? That is of course if they don’t drive the car…that’s important because you will need to have a “named driver exclusion” on all drivers that have access to the vehicle.
- Relocate: Alright, this is not the ideal suggestion for most, but if you’re planning on moving, try to find a zip code that’s more affordable. I didn’t say this was ideal, but it can save you money for sure. If you can’t afford to relocate yourself, maybe you can consider relocating the vehicle. Maybe you have a second home. Possibly you have a friend with extra garage space (named driver exclusion of course). This could save you money.
When your rates go up, don’t worry. There’s a solution somewhere.
