Everyone who drives needs car insurance. That’s why it’s so frustrating when you go to renew your car insurance and find out your bill has gone up. Sometimes you know why your bill went up, but other times it’s a mystery.
This article is designed to help you understand why your car insurance rates went up. We’ll list 10 factors can cause your car insurance to go up, explain what goes into setting car insurance prices, and go over some other things that can make the price of your insurance increase. Use the information in this article to get better control of your car insurance so you can make an informed decision about which company is right for you.
10 Things That Make Your Car Insurance Price Go Up
There are lots of different things that can your car insurance cost more. These are the 10 most common reasons the price of your insurance jumped between your current and last renewal.
- New convictions or pleas for driving violations like speeding.
- New claims against your insurance.
- New drivers added to your policy or switching the primary driver of different vehicles.
- Removing a second car from your policy, taking away a multi-car discount.
- Changing where you live – insurance is partially based on your address.
- Changing the payment or fee structure of your plan. For example, you’ll pay more overall if you pay month-to-month instead of paying for the whole term up front.
- Change in medical conditions that make you more likely to file a claim.
- New job – your profession influences the cost of your car insurance.
- Canceling a home policy or other policy that produced a multi-policy discount.
- Mistakes. Plain and simple. Insurance companies can make mistakes, especially when they’re doing something as complex as determining car insurance pricing. That’s why it’s always a good idea to check with your car insurance company to make sure you understand your bill and ask why there was a price increase.
Understanding How Car Insurance Companies Set Prices
The process of setting car insurance prices is very complex. This section is designed to help you understand what factors go into setting car insurance prices. You should use this information to try and get the best car insurance price possible.
Car insurance prices are based on a risk-reward system. The insurance company uses a variety of factors to determine how much of a risk they face in paying out a claim over your driving. They then use these risk factors to set your price. It’s important to remember that car insurance companies are businesses, and businesses need to make a profit. Therefore, the higher the risk the insurance company will need to pay out over your insurance policy, the higher the cost of that policy.
Once you’ve got that down, it gets easier to understand what kinds of things can influence your car insurance price. Anything that increases the risk you’ll generate a claim, or that increases the cost of any claim you generate, will make your car insurance costs increase. In the same way, anything that lowers the risk you need to make a claim or that lowers the cost of any claim you make will lower the price of insurance.
One easy example to understand is the type of car you drive. People that drive fast, expensive cars will pay more for car insurance. That’s because these cars cost more in repairs and replacement than other cars. Additionally, the speed of the car means that any claims are likely to cost more. Also, faster cars are statistically more likely to be in an accident.
That last point is also important. While many car insurance companies offer apps and programs that price your insurance based on how you drive, there’s no way for an insurance company to perfectly price out your risk. That means they use statistical information to help determine pricing.
For example, an 18-year-old could be the greatest driver in the world. But 18-year-olds are statistically more likely to be in an accident. Also, the accidents they’re in tend to have a higher associated cost. That means insurance will be expensive for the best driver in the world, simply because they’re 18.
This last example brings up an important point. There are two types factors that affect car insurance. External factors beyond your control and factors in your control. We’ll cover external factors first. These factors are things that most people have little to no control over.
External Factors that Affect Car Insurance Prices
External factors are things about a person, their situation, or the car insurance company that an individual doesn’t have a lot of control over.
Some of the biggest external factors include:
- Collisions, vandalism, or increased claims in your area. Car insurance companies use your address to help determine how likely it is you’ll make a claim. If there are more accidents or more claims in your area, then your costs will likely go up.
- Liability claims the insurance company paid out. It could just be a matter of bad luck, but sometimes an insurance company might wind up paying out more in claims than they were expecting. This goes for the entire population of their clients. Such a situation can result in everyone’s car insurance going up.
- More theft in your area. Most car insurance polices cover theft of your vehicle. There are several reasons someone may steal a car, from the car itself to the act of splitting it up for parts that can be resold. More car thefts mean higher premiums for you.
- A person’s age is a large factor in determining the cost of their car insurance. Generally, insurance will be cheaper for drivers in their 40-60’s, with inexperienced drivers and very old drivers seeing a rate increase.
Other Factors that Influence Car Insurance Costs
There are some factors that you can control when it comes to your car insurance costs. Some of the biggest factors that go into your car insurance price include:
- The cost of your car – higher value cars cost more to repair or replace. That means insurance companies will charge more to cover these cars. This is especially true for high-value, high-performance models.
- Your car’s safety features also play a role in the cost of your car insurance. More safety features means the insurance company is less likely to have medical bills to pay. It also means any medical bills won’t be as expensive as they could have been. That’s why things like air bags, anti-lock brakes, collision detection, and backup cameras can all lower the cost of your insurance.
- The performance your car can manage also affects the cost. Cars with a higher top-speed, better acceleration, and sharper turning are going to cost more than cars without these features. That’s because these features have a statistically significant relationship to the likelihood and cost of any accidents.
- Your driving history is a huge factor in the cost of your car insurance. In fact, most of the price of your car insurance is based around your driving history. The longer you go without a claim or any kind of traffic violation, the lower your insurance costs will be. That’s because a long, clean driving history shows the insurance company that you are a minimal risk for a payout. As a result, it’s important to always follow proper road rules and drive safely to ensure your insurance price is as low as possible. If you are looking for high risk auto insurance quotes because you do have a tarnished record just complete the form above and let companies compete for your business and offer the lowest price.
- Credit scores are another factor that gets priced in to the cost of your car insurance. Remember, insurance companies are in business to make a profit. Even if they don’t have to pay out any claims for you, they still need to collect payment. People with lower credit scores have a harder time paying their bills on time. This means that there’s a greater risk the insurance company won’t get paid. As a result, insurance premiums for people with lower credit scores are much more expensive than they are for those with higher credit scores.
- The type of car insurance you have also determines the cost of your insurance. The more comprehensive your coverage, the greater your insurance costs. Comprehensive coverage can include anything from theft and fire protection to policies that cover repairs from vandalism and hail damage. You can also get extras like rental car coverage while your car is getting repaired. Each of these additions increases the cost of your insurance.
- Financing is also an important factor. People that finance their cars are usually required to have comprehensive insurance. That way if there’s an accident that totals the car the financer is protected from a loss. As a result, people with financed cars will usually pay more for car insurance.
What Makes Car Insurance Prices Increase?
As discussed in the previous sections, there are lots of things that can make the price of your car insurance increase. The most important thing to think about when you’re trying to figure out why your car insurance went up is if there were any changes that make you seem like a greater risk to the car insurance company. Some of the biggest factors include things like:
- New accidents or claims
- New car
- New job or profession
- Changing primary drivers
- New traffic violations or tickets
- Changes to your credit score
If you go through all of these factors and still can’t determine why your car insurance costs went up, then it might be time to talk to the car insurance company. Even though the process of setting a car insurance price is complicated, you still have a right to know what you’re paying and why. Your price bump could even be an accident. That’s why you should make sure to call your car insurance company and ask them to go over the price of your policy with you. The next section will help you understand what questions to ask so that you can get the best understanding of your insurance price possible.
Things to Ask About if Your Car Insurance Price Goes Up
If your car insurance price goes up and you don’t understand why, then it’s important to get in touch with your company. After all, you work hard for your money, and you shouldn’t spend more of it on car insurance than is absolutely necessary.
The best way to get an understanding of your insurance cost is to have the insurance company go over every aspect of your insurance and why that aspect costs as much as it does. That way you can total up all the different parts of your insurance policy to arrive at the price you should be paying.
Every car insurance policy has multiple components to it. Some of the most common components are:
- Liability – how much you pay for things like bodily injury protection and property damage coverage.
- Collision – how much you pay for coverage from damage to other cars and/or damage to your own car
- Comprehensive – this category includes coverage for things like fire, theft, vandalism and similar things
- Endorsements – these are riders and additions to your coverage. It might include something like covering the cost of a rental car while your car is getting repaired. The more policy additions you have, the more insurance will cost you.
Picking the Right Car Insurance Company
Now that you understand all of the different reasons your car insurance price may have gone up, it’s important to understand what you can do about it to get car insurance rates that are more preferable. The internet has changed the way that car insurance buyers find and buy the insurance policies they need to drive legally. You can use online price comparison tools and reviews to help you determine which car insurance company is offering you the best price. Many insurance companies will offer a price match policy. That means you should always be shopping for car insurance even if you’re happy with your current car insurance company. Shopping around and finding a better price can mean that you get the coverage you need at a price you can afford.
General Questions About Car Insurance Going Up
This section covers basic questions about why car insurance goes up.
Why did my car insurance go up?
There are lots of different reasons your car insurance might go up. The best bet is to call your insurance company and ask for a breakdown of your bill.
Why does my car insurance keep going up?
Your car insurance can go up because of an increase of accidents around your area, a new car, new driver, loss of a bundle deal, or other reasons. Related: What do I do if I can't afford auto insurance?
Why did my car insurance go up for no reason?
Car insurance doesn’t go up for no reason. If you call your car insurance company, they can explain why your rates are higher this year.
Why is my car insurance going up every year?
There are several reasons why your car insurance goes up every year. You’ll need to talk to your insurance company to get a better idea about what’s happening in your situation.
Why does my auto insurance go up every 6 months?
You’ll need to contact your insurance company for a bill breakdown, as there are lots of different reasons your insurance can go up.
How much has car insurance gone up this year?
On average insurance prices increased by about 5% in 2019. Insurance prices in 2020 are expected to drop. Make sure you are comparing auto insurance rates by zip code to see what's going on in your area.
Car Insurance Going Up and Accidents
We’ll answer common questions about car insurance going up and accidents in this section.
How much does car insurance go up after an accident?
Lots of factors go into this, including the nature of the accident, your car, your driving history who was at fault, and so on.
How much does car insurance go up after a claim?
It depends on the nature of the claim. Your insurance company can give you a detailed breakdown of your bill.
How much will my car insurance go up after my first accident?
That depends on the accident and your insurance policies. Many companies offer accident forgiveness for your first accident.
How much does insurance go up if you total a car?
You can expect your insurance to go up, but the amount depends on lots of factors, like what kind of car you get as a replacement, your driving history, and more.
Why does both car insurance go up after an accident?
Filing a claim means you cost the insurance company money. As a result, your insurance prices will go up even if you’re not at fault. Related: Why is my car insurance so high?
How much does your insurance go up if you total a leased car?
There’s no one answer to this question – it depends on the circumstances of the accident, your driving history, and lots of other factors. Related: Do you need insurance to buy a used car?
How much do insurance rates go up in a multi car collision?
That depends on if you’re at fault or not, and the extent to which you’re at fault. You’ll need to talk to your insurance company to get a complete breakdown.
How much does your insurance go up after a car accident for teens?
Teens can expect a substantial jump in their insurance rates after an accident. However, the exact amount depends on lots of different factors.
How much does auto insurance go up with $10,000 claim?
There’s a lot of factors that go into how much insurance goes up. A $10,000 may or may not cause a substantial bump in your insurance rates depending on other things.
How much car insurance will go up after someone else crashes your car?
The amount your insurance goes up after someone else crashes into your car depends on the circumstances of the crash and your driving history.
Car Insurance Going Up and Tickets
This section goes over popular questions about car insurance going up after tickets.
How much does car insurance go up after a DUI?
How much does car insurance go up after speeding ticket?
The exact amount your insurance goes up after a speeding ticket depends on your driving history, how fast you were going, and other factors.
How much will my car insurance go up because of not having seat belt on?
It depends on the laws in your state. Some states only allow increases in insurance prices for moving violations.
How much does your car insurance go up for a speeding ticket without points?
The amount of rates will go up depends on the laws in your state and other factors, like how many other tickets or violations you have, the type of car you drive, your address, and more.
How much does car insurance go up after a DUI in Kentucky?
A DUI in Kentucky will close to double your current insurance rates in most situations.
How much will my insurance go up after backing into someone’s car door?
That depends on if you received a ticket or not. A ticket for improper backing can cause your rates to have a substantial jump.
Car Insurance Going Up and Insurance Companies
We’ll answer questions about specific companies and car insurance going up in this section.
Why did my car insurance go up with State Farm?
You can call State Farm and ask for a breakdown of your bill to find out why your insurance went up. If it makes financial sense try getting an auto liability insurance quote which could save you money.
Why did my insurance go up with General Auto?
General Auto will provide you with a breakdown of your bill if you contact their customer service number. This will help you understand why your bill went up.
Car Insurance Going Up and New Cars
This section covers common questions about car insurance going up and new cars.
How much will my insurance go up with a new car?
It depends on the car. Faster, riskier cars will cause your insurance to go up more than slower cheaper cars. Also if you are required to have full coverage this will definitely cost more. However we can help you find cheap full coverage insurance companies.
How do you find out how much your car insurance will go up for a new vehicle?
You can call your insurance company for a quote. You’ll need to make, model, and mileage of the vehicle you’re considering.
How much insurance goes up for a second car?
Not as much as you might think – most insurance companies offer a multi-car discount. That means you might save money per-car with a second card.
Does car insurance go up when buying brand new car?
It can, it depends on your current car and the car you’re driving. You can talk to your insurance company for more information about how much different cars cost to insure. Related: Liability vs full coverage auto insurance.
How much does insurance go up on new car with loan?
The amount insurance goes up after a new car with a loan depends on what kind of insurance you had before. If you already had comprehensive insurance, then your bill won’t go up much. If you only had liability, then your bill is likely to go up much more.
How much more will insurance go up for a second car?
On a per-car basis your insurance will likely go down for a second car because most car insurance companies offer a multi-car discount. Ask if you can get an auto insurance no money down option on the second car.
How much will my car insurance go up with luxury car?
The exact amount your insurance will go up depends on the difference between the cost of your current car and your new car, as well as risk factors like speed, safety, etc.
How much does insurance go up with a sports car?
If the sports car is faster and less safe than your current car, while also costing more than your current car, then you can expect your insurance to increase substantially.
Car Insurance Going Up and New Drivers
We’ll answer questions about car insurance going up and new drivers in this section.
How much does car insurance go up with a teenage driver?
That depends on how you structure your insurance. A teenage driver on their parent’s insurance won’t cost nearly as much as a teenage driver on their own insurance.
How much does car insurance go up when you add a 16-year-old?
There are a lot of factors that go into how much your insurance will go up when you add a 16-year-old. Your car, their grades, any driver training, and other factors all influence the price increase.
How much will my car insurance go up when I add my son?
It depends on several different elements. You’ll need to talk to your insurance company to find out how much insurance will go up in your specific situation.
Why does my auto insurance go up with children?
Your auto insurance goes up with children because the insurance company has to prepare for the chance that they’ll be injured in an accident.
Other Reasons Car Insurance Prices Go Up
This section covers other reasons that car insurance goes up. Check here if you can’t find your question in one of our other sections.
Car insurance went up when I moved, why?
Insurance companies use the location you live to help determine the risk you file a claim. If your area produces more claims, then your insurance will go up.
Why does my insurance go up when I remove a car?
Your insurance can go up when you remove a car because you’re no longer getting a multi-car discount from the insurance company.
Does my car insurance go up when I work further away?
Insurance goes up when you work further away because you’re on the road more. That means you’ve got a greater risk of an accident.
Why does car insurance go up when you change address?
Insurance doesn’t always go up when you change address, it can go down. It depends on the risk factor the place you change to has compared to where you were living before.
Why will car insurance go up while in bankruptcy?
Car insurance rates go up when you’re in bankruptcy because your credit scores are impacted, and those influence the cost of your car insurance.
What’s the point of paying car insurance if your rates go up when you use it?
The amount you pay into car insurance will probably be less than the amount you pay out in damages if you don’t have insurance. Related: Is there a grace period for car insurance?
Why does car insurance cost keep going up in Florida?
There are lots of reasons why insurance could continue to go up in Florida, your local insurance company can help you understand why your specific rates are going up.
How much does automobile insurance go up from a car to a truck?
It depends on lots of factors, including what kind of car and what kind of truck, as well as your driving history, address, and more.
What colors make car insurance go up?
Car insurance prices actually aren’t affected by the color of your car.
How much will car insurance go up moving from Indiana to California?
It depends on exactly where you’re moving too and from. Your local insurance company can tell you the difference in rates if you tell them where you’re planning to move.
How much does Texas car insurance go up per point?
There’s no set per-point increase in car insurance prices in Texas. It depends on your driving history, car, address, nature of the ticket, and so on.
How much will your car insurance go up if you max out the injury?
It’s hard to answer this question generally. You’ll need to talk to your insurance company to find out more about your specific situation.
If I’m issued a sr22, how much will my auto insurance go up?
You can expect a substantial jump in your car insurance, usually around double, if you get an SR 22.
Why does car insurance go up if your car was broken into?
If your car was broken into, it shows the area you live in isn’t safe, and the insurance company needs to protect itself against the cost associated with a greater risk of paying out a claim.