Why Is My Car Insurance So High?
There are many factors that affect your car insurance rates. They typically fall into two categories: factors within your control, and factors outside of your control.
Car Insurance Premium Factors Within Your Control
- Type of vehicle: The type of car you drive can affect your car insurance premium in a number of ways. For example, older cars tend not to cost as much to insure as newer cars. However, if your old car has a poor safety rating, it may be less expensive to insure a newer car with a higher safety rating.
- Driving record: Better driving records typically translate to lower car insurance premiums.
- Bundled coverage: You may be able to save on your car insurance if you bundle your policy with another form of insurance, such as life or homeowners insurance.
Other Auto Insurance Rate Factors
There are other aspects of your life that may affect your auto insurance rate. These factors typically are difficult or impossible to change, such as your:
- Zip code
- Lack of driving experience
Can Rates on Auto Insurance Increase Without Notice?
Your car insurance rate is locked in for six months or a year, depending on your specific policy. Keep in mind that your policy is an agreement between yourself and your car insurance provider. Either of you may take an action that ends up changing your insurance rate.
How Does Changing My Policy Affect My Premium?
If you make changes to your policy, it’s fair to assume that those changes will affect your monthly premium. This could be anything from adding new drivers or new vehicles to car accidents, claims, or tickets added to your driving record.
Such changes to your policy—and therefore your premium—can be unpredictable. It is always a good idea to ask your agent when a change is made to your policy how it might affect your premium.
When the Insurance Company Changes Their Rates
The only time the insurance company can change their rates is after they file the changes with the State of Michigan and get approval to implement those changes at your next renewal.
Independent insurance agents are notified whenever an insurance carrier files with the state to change their rates. They are also typically given notice of any rate changes 30–60 days prior to your renewal. This allows plenty of time to review your policy and look for ways to save.
Why Is My Car Insurance Premium Increasing?
1. You Changed Your Address to a Different Zip Code
Where you live can have a big impact on how much you pay each month for car insurance. Although most people know that car insurance rates vary by state, you may be surprised to learn that your premium can vary drastically if you live just a few miles down the road, depending on your zip code.
Insurance companies take a lot of data into account when determining your car insurance rate. When looking at your zip code, insurers will study a variety of factors, including but not limited to:
- Crime rate
- Accident rate
- Local road conditions
- Number of insurance claims filed by population
- Severe weather events
- How many people take public transportation
How Does My Zip Code Affect My Car Insurance Premium?
Want to know how your current zip code affects your rate? Curious how moving to a new home may change your premium?
Call our office. We’ll let you know how your current or potential zip code may affect your monthly payment.
2. You Had an Accident or Claim
Getting into an accident and/or filing an insurance claim may be the reason your auto rate increases.
What If I Wasn’t at Fault for My Accident?
Fault may or may not affect your car insurance premium, depending on your insurance carrier. Michigan is a no-fault state, which means that your policy is built to cover your expenses regardless of who is at fault.
Keep in mind that fault doesn’t apply to all car accidents. For example, if you hit an animal, fault isn’t a particularly useful way to evaluate the accident. Comprehensive coverage covers theft and damage due to animals and extreme weather.
Will One Accident Affect My Insurance?
Some carriers may not increase your car insurance rate if you get into one car accident through no fault of your own. However, if you’re at fault for the car accident, or even if you’re not at fault but you’re in more than one accident, your rates will likely increase.
What About Accident Forgiveness?
Some carriers offer accident forgiveness, in which your first car accident is completely forgiven. Policies that offer accident forgiveness are typically more expensive than your standard car insurance. Also, if you change insurance companies, be aware that your “forgiven” accident will likely stay on your record, potentially affecting your new insurance rate.
How Much Will an Accident Affect My Insurance?
Car accidents typically result in a higher premium, but it won’t last forever. Higher rates for accidents start to go down again after three years of good driving. After five years with no accidents, your rate should return to normal.
3. You Added a New Driver to Your Policy
Who Counts as a New Driver?
When you think of a new driver, you may picture a 16-year-old excitedly getting behind the wheel. However, your insurance carrier considers anyone newly added to your policy as a new driver. This can be someone who just got their license, like a teenager, or it could be someone who has recently joined your family, like a new spouse.
A new driver can also be someone new to your household in general. Typically, you have to list anyone who may be driving your car on your policy. If you live with roommates or have adult children living at home, you’ll need to list them as potential drivers on your policy. If they have their own car insurance, they will still be listed as a non-driver in your household on your policy.
Can New Drivers Qualify for Discounts?
If your new driver just got their license, they won’t qualify for any good driving discounts because they don’t yet have a track record to prove they’re a good driver. However, if your teenager just got their license, they may qualify for a good student discount.
Some carriers offer discounts if your child goes through a teen driving program online. Others may offer a discounted rate if your teenager downloads a tracking app that monitors their speed, braking, and other driving factors for a short amount of time, typically 90 days.
4. You or Your Vehicle Got Older
How Your Age Affects Your Car Insurance Premium
If you drive safely and don’t get into any accidents, you’ll enjoy your lowest car insurance rates from ages 25–65. Teenagers and seniors are more costly to insure because of lack of experience and potential health problems, respectively.
Are Older Cars More Expensive to Insure?
It may surprise you to learn that older cars are typically less expensive to insure than new ones. Older cars are less valuable, so they are less expensive to repair or replace.
Sometimes, an older car may result in higher rates if the car has a terrible crash rating. It may be less expensive to buy a newer car if it also comes with a better safety rating.
5. You Got a New Vehicle
Buying a new car doesn’t automatically translate into higher car insurance rates. However, even if your rates do go up, they may not go up by much.
The safer a car is, the better your insurance rates will be, and newer cars are often safer than older ones. Still, if you buy a new car, it’s a good idea to be prepared for at least a small bump in your monthly premium.
How Can I Find Lower Rates or Savings?
Just like there are certain circumstances that may increase your rates, there are also steps you can take to lower your car insurance premium and save money. At Doyle and Ogden, we recommend:
- Being a good driver: A good driving record goes a long way in keeping your car insurance rates affordable. Don’t speed, don’t text and drive, and don’t drive under the influence.
- Researching before buying: If you want to buy a new vehicle, check out its crash rating first. Try to make sure your rate increase for buying a new vehicle will be offset by a rate decrease for buying a safer vehicle.
- Bundling your insurance: Often, you can save money by bundling your car insurance with other policies, such as homeowners, life, or umbrella insurance.
- Speaking with an independent agent: At Doyle and Ogden, we offer policies from a variety of carriers, ensuring you’ll find the right fit. We’ll help you find the best insurance rate for you and your family.