Having the right auto insurance can protect you, your family, your passengers, and other drivers. In many states, having some level of car insurance is mandatory. If an accident happens, having the right coverage can take care of any bodily injury or property damage costs that could otherwise arise. But it isn’t free. Car insurance is paid for in “premiums.” – These are typically monthly rates that you’ll need to pay to stay insured.
If you’ve recently found that your auto insurance rates have increased unexpectedly, and you haven’t had any recent accidents, traffic violations, or infractions, it can be frustrating. What did you do wrong? There are numerous reasons why car insurance rates can increase unexpectedly. Let’s go over a few.
No. 1: Because you’ve had an at-fault incident, a traffic ticket, or violation.
You’re probably already aware that getting into an accident, getting a ticket, or breaking the laws of the road (and possibly committing a criminal offense) can impact your rates. The more traffic tickets you have, the more accidents you’ve been in, the likelier you are – statistically – to be involved in another accident, or get another ticket. So, that will be reflected in your insurance premiums. Parking tickets, to note, do not count towards your insurance premiums.
At-fault accidents will also raise your rates. Some insurance providers offer an endorsement that will waive a first incident, but your rates will typically increase per claim afterwards.
No. 2: Adding additional drivers or vehicles onto your policy.
When you add another vehicle onto your policy, or even replace your existing car with a newer model, your insurance premiums may go up. This is because it may be more expensive to replace and/or repair a newer vehicle or an added vehicle that costs more.
Furthermore, by adding a new driver, your rates can increase. Newer drivers – especially newly licensed drivers, and drivers that are under the age of 25 – being added to your existing insurance policy may result in a rise in your insurance premium. Drivers’ premiums are influenced by their years of experience driving as well as their licensed history.
No. 3: There has been a rise in claims in your area.
Unfortunately, whether you’ve been a great driver or not, if your local area is seeing a lot of weather-related claims, motor accident claims, or theft/vandalism claims, you’ll likely see your rates increase. There is, sadly, nothing you can do about this increase, but it’s important to know.
No. 4: Inflation and rising material costs makes cars more expensive to repair.
Inflation being relatively high, especially in the United States, can impact auto damage repair costs. Inflation can, furthermore, impact claim settlements. This causes insurance companies to hike their rates in order to compensate for the cost of claim payouts. We are seeing this due to natural fluctuations in the economy, but the rippling effects of the pandemic haven’t fully died down either.
Newer vehicles, especially electric and hybrid models, are also gaining traction in the automotive world, and they’re becoming more populous on the roads. The issue with these cars is that they’re still so expensive to manufacture and repairing them is expensive, too. Consequently, the cost to insure these cars is much higher. As newer cars are decked out with more and more interesting technology, they become more costly to repair if an accident ever occurred.
No. 5: Labor shortages.
Here’s yet another factor that you, unfortunately, will not be able to change. Labor shortages, in conjunction with supply chain issues, have made it harder for companies to find workers. This means fewer workers can work on vehicle repairs, and pay rates will increase as an incentive to attract more workers. Therefore, it’s more expensive to repair and replace vehicles. Insurance companies compensate by increasing rates to prepare for higher claim payouts.
No. 6: You’ve changed your driving habits.
The more you drive, the higher your insurance will cost you. That’s because the more time you spend on the road, the more likely you are to be involved in an unexpected collision or accident. You can combat this by opting for public transport where possible or avoiding using your vehicle for small, unnecessary trips. You may have noticed a rate reduction during the COVID-19 stay-at-home orders. This is because, since many people were no longer commuting, accident rates were down. Now that people are returning to work that has changed.
There are a lot of factors (some in your control and some out of your control) that can impact how much you’ll pay for your insurance. Even drivers who have a spotless driving record may see that their rates have increased recently due to variables out of their control. Car insurance rates can be influenced by the choices and decisions you make, and they can be entirely out of your hands.
With insurance, having more knowledge is better! Hitchings Insurance Agency’s experienced insurance professionals can walk you through your auto insurance options, coverages, and so much more. You’ll find that making small changes – such as raising your deductible or dropping excess coverage on older vehicles – can make a world of difference. Ask about discounts. We will work with you one-on-one to get to know you, and provide advice based on your circumstances!
Here are a few general tips for reducing rates:
Raise your deductible
Drop collision/comprehensive on an older vehicle
Ask about discounts
Install a security alarm or car alarm
Bundle your policies
Take a defensive driving course
Interested in shopping around for lower auto insurance rates? Start with the team at Hitchings Insurance Agency today and get affordable insurance tailored to you.