When you’re getting car insurance or switching providers, there are a few things insurers will want to know.
First, car insurance rates and age go hand in hand, But there’s so much more than that. Insurers will ask for details like your gender, where you live, your driving history, and the type of car you own. How much you drive, whether you use your car for work or play, and where you park also factor in. So do coverage limits and deductible choices.
Curious about why car insurance premiums go up? The answer isn’t always simple, but several factors can impact your rates. In this article, we’ll break down what affects car insurance costs and share tips to help you save.
14 reasons why car insurance rates go up
If your auto insurance premiums are higher than you think they should be it could be the result of a combination of factors—everything from how you drive to the type of car you own to the area where you live and a lot more. Let’s take a look.
- Your driving history
Your driving history plays a big role in how much you’ll pay for car insurance. If you’re under 25, your rates might be higher because insurers consider younger drivers to be more likely to get into accidents. On the other hand, older drivers may see rates go up, as well, mostly due to the possibility of slower reaction times or other age-related factors. - Your driving record
Even if they happened long ago, accidents, DUIs, and speeding tickets affect insurance rates. Also, if you’ve had a history of claims, insurers might see you as a higher risk, and that could result in higher premiums. The fewer incidents on your record, the better your chances of keeping your rates down. - You’re adding a new driver to your policy
Adding a new driver to your policy can increase your premium because more drivers mean a higher risk of accidents. Insurers evaluate all drivers on the policy, and that can impact the overall cost. This is especially true if the new driver is a teenager or someone with limited driving experience. - You’re changing coverage options
Increasing your coverage limits, like choosing between at-fault and no-fault insurance, adding more comprehensive coverage, or lowering your deductible, might seem like good options for more protection, but they can raise your premiums. Insurers like to see clients have some skin in the game and if you ask for higher coverage limits or a lower deductible, that means more risk for them. - Your credit score dropped
Your credit score can affect your car insurance rates. Insurers often look at your credit score when determining premiums because a lower score may indicate higher risk. If your credit score drops, you might see an increase in your rates. - You ignored a parking ticket
A parking ticket won’t affect your insurance — unless you ignore it. Unpaid tickets can lead to registration issues, collections, or a lower credit score, which could also cause your insurance premium to go up. Paying fines on time helps you avoid unexpected rate hikes. - You got a new car
Newer and more expensive cars, including electric cars, typically cost more to insure, mainly due to advanced features and built-in connectivity. Plus, some models are more likely to be stolen or involved in accidents, which can push your premiums even higher. On the other hand, switching to a used car might lower your rate. Either way, tell your insurer immediately when you want to switch coverage. - Your commute changed
Your insurance rate is partly based on how much you drive. If your commute gets longer, your premium might go up. It’s important to inform your insurance provider to avoid surprises since underreporting mileage could cause issues later. On the flip side, if you’re driving less—like due to remote work—let your insurer know; it could help lower your rate. - Everything is more expensive
When inflation rises, both car repair and healthcare costs typically go up, leading to higher insurance premiums. Today’s cars are more expensive to fix, and as repair costs climb, so might your rates. Similarly, as medical care costs increase—especially for coverage like personal injury protection in car insurance—insurers adjust rates to cover these higher expenses. - Your location is considered risky
How does location affect car insurance rates? If you live in an area with high accident rates, extreme weather, or heavy traffic, insurers may pass the costs on to you to cover the added risk. Plus, more drivers on the road can also mean a higher likelihood of accidents and a greater chance of encountering uninsured or underinsured drivers, leading to higher rates. - Neighborhood crime rates
Insurers factor in the risk of damage to your car based on its surroundings. If your neighborhood has higher crime rates, like frequent vehicle theft or vandalism, your premiums will probably go up, as well. - A rise in insurance claims nearby
Even if you haven’t been in an accident yourself, if there’s a rise in claims or fraud in your area, your rates could go up. Insurers base premiums on regional factors, so if claims are common in your ZIP code, premiums can be higher for everyone in that area. - You’re no longer getting discounts
If you’ve been enjoying discounts for things like furthering your education, safe driving, or bundling multiple policies, losing these discounts can cause your premium to jump. For example, a safe driver discount could expire if you get into an accident, resulting in a higher rate. Also, see our blog about 25 car insurance discounts you should look into. - Your life has changed
Moving, getting married, having a child, or starting a new job can all affect your insurance costs. Adding a spouse or a second car to your policy, parking in a different neighborhood, or driving more each month can change your risk level—and your rates. If your life changes, it’s wise to update your insurance with a requote. Otherwise, your insurer could deny coverage for repairs after an accident.
How to reduce car insurance premiums
Think that you’re paying too much for car insurance? Here are some tips about how to reduce premiums.
- Compare car insurance quotes: Shopping around is key. Even small differences between insurers can lead to big savings. Don’t settle for the first quote you get. Take the time to compare options.
- Bundle policies: Consider bundling your car insurance with home or renters insurance. Many insurers offer discounts when you bundle multiple policies, which can save you money in the long run.
- Review and adjust your coverage: Review your policy to adjust coverage and avoid paying for unnecessary extras. For example, if your teen is away at college, you might remove them from your policy. If your car is older and not worth repairing, raising your deductible could help lower monthly costs. It’s also recommended to understand how deductibles work to make the best decision for your budget.
- Maintain good credit: Insurance companies often use your credit score to determine premiums. By keeping your credit score healthy, you could qualify for lower rates. Regularly check your score and take steps to improve it if needed.
- Drive safely: Avoiding traffic tickets and accidents not only keeps you safe but can also keep your premiums low. And if you’re celebrating, leave the car at home and take a rideshare.
- Take a defensive driving course: Some insurers offer discounts for completing a defensive driving course designed to help improve your skills on the road. Some are even available online. Often, they’re free.
- Keep your old car (or buy a used one): Older cars usually cost less to insure, as they’re cheaper to repair or replace. If your car is still in good condition, consider holding on to it for a bit longer before upgrading to a newer model.
- Look into payment options: Setting up autopay or paying for the year upfront can score you discounts and help you avoid late fees. It’s an easy way to cut back on monthly bill paying while lowering your car insurance costs.
We’re here to help you find cheaper car insurance
As you can see, there are a lot of factors that affect your car insurance rates, and many of them are things you can adjust or control. Whether it’s comparing quotes, tweaking your coverage, or maintaining a clean driving record, there are ways to keep your premiums in check.
At The Baldwin Group, we don’t believe in cookie-cutter solutions. We’ll do the comparison shopping for you, finding the best rates and a policy that’s tailored to your unique needs.
Contact us today, and let our experts guide you toward the most affordable and customized coverage available.
