With the ever-rising gas prices that are making it difficult for people to drive their cars more than a few miles before regretting not having an electric car, you might be under a new burden; increasing car insurance rates. Auto insurance is both necessary and important to have if you want to drive a car safely and legally. Liability coverage, personal injury protection plan, collision coverage, etc can increase your expenditure bills and reduce your savings.
Rising car insurance rates are a serious problem that needs to be looked into or else you’ll never be able to get affordable auto insurance rates. There could be many reasons why you are seeing inflated car insurance rates. Which policies are getting expensive is also important to know as different factors affect different policies. Let’s take a look at all the possible factors your vehicle insurance rates are touching the sky.
General Price Hike
If there was a sudden price hike and there are no reasons that you could find, it was probably because your car insurance company increased their insurance rates. This price hike happens regularly and without any notice. Thankfully these price hikes are usually never too drastic, rising only about 2-3%.
So if you live in states where the cost of labor is high, and is laden with different taxes, then you can expect consistent price hikes. But if you look at some other states, it would be totally different. If you look for Indiana car insurance quote, you’d be surprised to see how low the prices are, given that Indiana comes fifth in low auto insurance rates.
One of the most common and fastest reasons why your car insurance rates can go up, including insurance premiums, is when you reduce your deductibles. Lower deductibles will instantly increase your premium rates. There is an advantage of reducing deductibles; in case of an accident, you’ll have to pay less from your pockets before the insurance company pays the rest.
If you keep your deductibles high, the premium rates would go down. The only problem with this is if you get in a car accident, you’ll end up paying more from your pocket. So there’s both a benefit and a loss for you, and it totally depends on how likely you are to get in a car accident.
You Made an Insurance Claim
Making a car insurance claim can and will increase your insurance rates. This is only not applicable when you make a claim on someone else’s liability policy when the accident was the other driver’s fault. But if you hit someone else and they claim your liability coverage, or you claim your collision/comprehensive coverage policy, your insurance rates will increase.
The rates won’t increase right away, but when the policy period is over. You can choose to change the insurance company but even the other auto insurance companies would want to know about your past insurance claims and increase the price.
The only way to avoid this would be getting an accident forgiveness add-on that lets you make an auto insurance claim without raising the prices. If you drive in areas with higher rates of accidents, then investing in accident forgiveness would be a great idea.
Your City is Getting More Riskier
Something that you might not have expected but can happen is driving in your city or state could become riskier. This could be due to statistics showing higher rates of accidents, thefts, insurance claims, etc. If all these factors rise, your auto insurance rates will climb up as well, even though your driving is just fine.
Insurance companies take statistics very seriously, and if a particular place is showing a higher risk of accidents, they do not want to take their chances. To offset the risk of an insurance claim, insurance companies will increase the rates. Sadly, there’s not much you can do to change that. Even something as simple as increasing the number of claims in your area can increase your insurance rates.
Adding Another Driver or Vehicles
If you saw an increase in your car insurance premium rates, it could be because of adding another driver to your policy or insuring another vehicle. When you buy car insurance, the insurance company will accept the claim if someone else, like your friend or a colleague was driving the car during the accident. You might have lent the car and it is perfectly fine by the auto insurance company.
What these vehicle insurance companies are not fine with is if your family member crashes the car and they are not added as a registered driver to your policy. This is because any family member who has a license and takes your car regularly will have to be a registered driver.
But adding someone to your auto insurance policy will increase the rates as the company now has to assess the risk of an accident of the other driver as well. So the more people you add, the higher the rates go.
Getting older can also be one of the reasons why your insurance rates are going up. For teenagers, growing up is a great thing, not just in general but also for auto insurance rates. But if you are over the age of 50, then growing up is not just about painful knees or backaches, but also about rising auto insurance rates.
As people grow older, over the age of 50, the risk of road accidents also increases, which makes car insurance companies raise their rates. Sadly, you cannot do much about this factor either.