Why Did My Car Insurance Go Up For No Reason?

Many people have pretty straightforward driving records. Many driving records don’t have any accidents listed, and no claims have been made on them. Even so, these people can still see their insurance plans go up. Automobile insurance premiums can go up and down based on a multitude of different factors. Significant life events can have an impact on car insurance plans, even though people might not realize that life events can do so. That said, there are many reasons that a person's car insurance plan premium can go up. Even moving a few houses away from where you currently live can have an effect on your auto insurance premium.

Why Did My Car Insurance Go Up?

Car insurance plans generally do not go up for no reason, though sometimes auto coverage providers change the formulas they use to determine rates. It is possible for the amount a person pays for car insurance to go up for no reason, though it is unlikely. In most cases, there are reasons that a person’s insurance fees will go up.

Car insurance carriers deal in risk as part of their business model. You are paying your provider to take on the risk of you getting into an accident. If you do get into a car crash, or another event happens to your vehicle that damages it for a covered reason, your insurance provider may have to pay for the costs. Since car insurance is a business that intends to make a profit, companies use a plethora of different factors, as well as mathematical equations and statistics, to calculate the risk a policyholder poses to them financially if sold of policy. The person's car insurance rates are determined using these formulas and factors. Higher risk drivers are more likely to pay higher premiums. These are drivers who are more likely to make a claim. Drivers with a long history of safe driving under their belts are considered lower risk drivers and will pay lower prices for auto insurance plans on average.

Knowing the most common reasons your car insurance may have increased even though you did not file a claim, have an accident, or get a ticket, is essential. These are some of the most common reasons your rates may have gone up:

Reason #1 - You Have Moved

It does not take moving very far for a person's car insurance premiums to be affected. The ZIP Code you are located in plays a significant role in the car insurance premiums you pay. It does not even have to be a change from one ZIP Code to another; some neighborhoods and cities have different prices than the ones next to them. Using statistics, a car insurance provider will determine the likelihood of theft, accidents, and tickets in the neighborhood or city that you live in. Places that have a higher crime rate might pay higher rates on average after the crime rate is combined with other variables.

Reason #2 – The Area You Live In Is Changing

Some statistics do not stay the same from one year to the next. While you may have lived in the safest city in your state for ten years straight, it may drop to be in the middle of the pack over the next few years. Crime rates in your area may rise, or accident rates may go up. The risk of natural disasters in your area can change, or more studies may come out about them. Car insurance rates can go up because of these things, but it is also possible for auto insurance rates to go down if the opposite occurs. In some areas, there can be fluctuations from one year to the next. Not only can the neighborhood you are living in be taken into consideration, but it is also possible for the ZIP Code, county, and region to have an impact.

Reason #3 – Your Credit Score Changed

Many people are not paying attention to their credit scores regularly. They can have an impact on the rates people pay for automobile insurance in many states. A few states have made it illegal for car insurance providers to use a person’s credit score to determine what they pay for auto insurance premiums, but in most states, your credit score can impact your insurance. People who have lower credit scores overall are statistically more likely to file a car insurance claim. If your car insurance rates have gone up, it might be because your credit score has gone down. Fortunately, checking your credit score is something that you can do. Also, if your credit score is lower than you would like it to be, you can work on improving it. Improving your credit score can have positive impacts on more than just your car insurance premiums. They can make it easier for you to get a loan or credit card as an example.

Reason #4 - Changing Auto Repair Costs

Insurance providers are responsible for covering the costs to repair or replace a vehicle after an accident occurs when it is covered for the crash. Sometimes the cost of labor or equipment may have increased. In some cases, the expenses associated with purchasing a new car may have gone up. This may be a regional thing in terms of the amount people in the area are charging for their repair services, but it may also be specific parts associated with the vehicle you own. This is something that drivers do not have control over, and may be something that affects the prices they pay for their auto insurance plan.

Reason #5 - Increasing Insurance Fraud And Rates Of Uninsured Drivers

Unfortunately, some people try to fraud their insurance provider. This can cost automobile insurance carriers billions of dollars every year. If the area you are living in has seen an increase in the amount of fraud that is happening, premiums may be raised to compensate for the money lost due to fraud. Insurance companies need to remain solvent, so they need at least as much money coming in that they have going out. The percentage of uninsured drivers can also affect the costs insurance companies pay out. Insurance providers may need to foot the bill, even if an uninsured driver is found to be at fault in an accident. With one out of every seven drivers being uninsured, this costs companies a lot of money. If you are in an area that has seen an increase in the rate of uninsured drivers, you may see your car coverage premiums go up.

Other Reasons Rates May Go Up

There is a long list of reasons a person’s premiums may go up. Higher speed limits are linked statistically to higher rates of traffic fatalities. If your state or region raises its speed limits, your car insurance premiums may increase shortly after. Not only that, but rising medical costs, increasing rates of collisions, increasing rates of distracted drivers, an increase in natural disasters, and higher administrative costs can have an impact on what you pay. In some cases, it is merely that a person has aged into another statistical category that their premiums increase. Regardless of the reasons why your premiums have increased, shopping around for auto insurance policies can help you save money. Get free quotes at Cheap Auto Insurance today. Finding the best policy available for your needs can be done quickly and easily here.