Having car insurance is a mandatory part of owning a vehicle legally. Typically once you’ve got a monthly payment it stays the same. But sometimes your car insurance can actually go up.
Most people become confused when they see that their rates have changed. There are a few reasons why this may happen for you to watch out for.
Keep reading to find out these 5 possible reasons for your insurance rate increase.
1. Getting Into a Car Accident
Car insurance is determined by multiple factors and driver safety is one of them. The majority of the time, getting into a car accident with result in an insurance rate increase. Sometimes you may be able to avoid this if it is proven that the incident wasn’t your fault.
Most insurance companies will work off of a system that judges how well you’re doing as a driver. Besides fender benders, you may also see some changes to your policy price when you get traffic tickets and driving violations.
2. Moving to Another State
Depending on the state that you live you may witness an insurance rate increase. If you’ve moved to a different state then you might have seen the price of your premium fluctuate already.
States that tend to be higher in population, have more accidents yearly and are susceptible to certain types of weather may have higher average insurance rates. Unfortunately, if you move to a different state and re-register your car, you will need to buy auto insurance at the premium for your new address location.
3. Adding Another Car/Driver
Sometimes your insurance price may have increased because you’ve added a new car or driver onto your policy. This is an obvious change, as there are more vehicles or people to be insured at that point.
However, there are a variety of factors that can go into how much more is added to the price.
For instance, the make and model of the car or the new driver’s age could cause the addition to be pricier than the first vehicle and driver. Younger folks and people that have recently obtained their licenses are often more likely to cost more due to their lack of driving experience.
4. Buying a New Car
Typically when you buy a new car, most companies require you to leave off of the car lot with full coverage. This is often much higher than just liability coverage payments.
Newer cars cost more to replace so the prices for policies are more expensive. There are also higher chances for theft and breaking in more modern models.
5. Letting Insurance Lapse
You may see an insurance rate increase when you let your policy lapse. This basically means that you haven’t made a payment and the plan was canceled. Sometimes when you go back to reinstate the policy, there is a rise in the price due to the lapse.
Experiencing an Insurance Rate Increase?
Many people are initially stunned when they find out there was an insurance rate increase in their policy. The best thing to do is to reach out and figure out the cause so that you can possibly work on lowering it if possible.
For more tips and advice on vehicle and insurance-related topics, check out our blog.