Sometimes you can predict when your auto insurance premiums are going to rise and other times a rate increase will hit you completely by surprise. While an increase in your insurance premiums could be related to your driving record, it’s also possible that a rate increase may have nothing to do with your driving at all. We’ve compiled a list of some of the most common reasons for a rate increase below.
Causes Of Auto Insurance Premium Increases
Changing Risk Factors In Your Region
There are external factors beyond your control that can affect your insurance rates. Weather, local policies, and other drivers in your region can affect your rates. Increases in extreme weather events can increase collisions. Local governments may raise speed limits for local roads or change road laws that impact road safety. Your rates will also increase if crime increases in your area or the number of uninsured drivers climbs.
Change of Address
As an extension of the previous cause, if you’ve recently moved, your rates will change accordingly to match the level of risk in your new location. If you’ve moved to an area that is considered a higher risk to insure, your rates will rise.
Accident Claims, Tickets or Other Citations
It’s well-known that submitting an accident claim or getting a speeding ticket or citation will earn you a rate hike. That is precisely why many drivers will pay for minor car accident damage out of pocket. Sometimes paying for minor damages on your own ends up being less expensive in the long run compared to an increase in your rates.
Claims, tickets, and citations can stay on your insurance record anywhere from three to five years and you can end up paying higher rates during that entire duration. Subsequent claims or tickets during the three to five year period will substantially hike your rates further. The severity of your ticket or citation will be taken into account. For instance, going 10 MPH over the speed limit will not increase your rates nearly as much as going 50 MPH over the speed limit.
Rising Medical & Repair Costs
Insurance helps cover expenses related to medical care and vehicle repair after an accident. Naturally, when those costs rise, your premiums will have to rise as well. Inflation can be partly to blame for a rise in accident recovery expenses, but there are other factors at play. For over a decade, healthcare spending has outpaced economic growth. The ever increasing spend on healthcare has steadily driven costs up. Cars are also becoming more expensive to repair and high-tech features are to blame. As vehicles become more complex, more parts and knowledge is needed to repair them. Vehicle repair costs increased 2% on average nationwide from 2016 to 2017 and costs are expected to continue to rise.
New Drivers Have Been Added To The Policy
Just about every insurer will require that every licensed member in your household is listed on your auto insurance policy. If you need to add your spouse or your new teen driver to your policy, you can expect a rate increase, because the insurance company will have an additional driver to insure.
If your spouse has a poor driving record, it may actually end up being cheaper to list your spouse as a driver on your policy, but keep your auto policies separate. Combining policies with a high risk driver can raise rates for both drivers.
Regardless of whether or not you combine policies, you’ll want to make sure everyone in your house with a license is listed. If one of your family members gets into an accident and isn’t listed as an insured on your policy, your claim can be denied on the grounds of misrepresentation.
Age Related Factors Are At Play Changes In Medical Conditions
Statistically speaking, younger drivers (aged 25 and under) are less experienced, less likely to drive cautiously, and more likely to be involved in an accident. If you’re 25 or under, an insurance company may be charging you a higher rate to combat the increased risk of an accident.
Similarly, drivers on the other end of the spectrum can pose a higher risk as well. Older drivers can develop issues with eyesight or medical conditions like dementia and Alzheimer’s that can increase the risk of an accident and therefore increase insurance rates. Drivers typically won’t see an increase in rates until they reach the age of 70.
Ways To Save Money In The Event Of Rising Rates
If you’ve been hit with a higher insurance rate, there are a few actions you can take to lower your insurance costs.
Bundle
Most insurance companies aren’t shy about advertising discounts and savings with policy bundles. Nevertheless, some people can still overlook bundling as an opportunity to save. If you own a home, you can bundle your home insurance with your auto insurance to save as much as 20%. Many insurance companies also offer life insurance and will provide additional discounts for bundling life insurance as well.
Enroll In Autopay
Enrolling in autopay helps your insurance company consistently receive premium payments on time. As a result, some insurance companies offer discounts for autopay enrollment. Depending on the company, there may also be discounts available for opting into paperless statements. You should check with your provider to see if these discounts are available.
Add Safety Features To Your Vehicle
Most insurers will appreciate any actions you take to make your car safer to drive. Upgrades like electronic stability control, anti-theft devices, passive restraints, tire pressure monitoring systems, dashboard cameras, daytime running lights, reverse monitoring systems, and lane departure warning systems could qualify you for a vehicle safety feature discount.
Shop For A New Insurance Provider
As evidenced by price optimization, insurance companies don’t always reward loyal customers with better discounts. If you’re not happy with the rate you have, it may be time to start looking for a different insurance provider. You may be pleasantly surprised by the quotes other insurers offer.
Reasons To Consider Doyle & Ogden If Your Shopping For Insurance
If you’re unhappy with your current auto insurance rates and shopping for a different provider, the agents at Doyle & Ogden are here to help. For over 60 years, our team has remained committed to helping our customers earn the best coverage at the best possible price. Furthermore, our team actively monitors your policies so that if your rates greatly increase, we can present different options to keep your costs stable.
We take great pride in being a single source solution for all of your insurance needs. You can bundle with us and save big. Contact our agents today by filling out a contact form or calling (616) 949-9000 to learn what Doyle & Ogden can do for you.
