Let’s say you’re a good driver and drive very carefully. You have not had a speeding ticket in ages and you’ve never been in an accident. Now, when you look at how much your car insurance costs you, you might begin to wonder ‘Why is my car insurance going up every year?’ Well, take it from us, you are not alone. Every year thousands of drivers are puzzled by the increasing insurance costs.
So why is your car insurance increasing? There could be many reasons. We have compiled a list of reasons why your car insurance goes up every year.
- Getting into an accident
- Accident statistics
- Driver’s ZIP or postal code
- Car make and model
- Company’s overall new or changed payment plan or rates
Being involved in an accident can lead to an increase in rates—every driver knows this. As insurance companies reward you for the number of years you have passed without any collision, once you claim after having a collision and are at fault, you’ll have to rebuild your claim-free reputation.
Drivers who get a violation, such as speeding tickets or the like, are bound to get an increase in rates. If you get a traffic ticket, the impact on your periodic insurance payment is directly proportional to the severity of the violation.
If your license is suspended or altogether canceled due to any reason, it will directly impact the installment on your premium insurance.
Distracted drivers are increasing the number of accidents every year. Checking your phone for messages or dialing a number can result in catastrophic accidents. With the advent of mobile internet, online music apps, video streaming services, and video calls, the frequency of motor accidents on the roads have skyrocketed, thereby causing a steady increment in car insurance costs.
Aside from accidents, any change in your address could place you in a geographical location where insurance is more expensive. This may depend on varying insurance rates between states and in cities within the same state. If you move to an accident-prone area, chances are your insurance will become more expensive.
Modern vehicle technology such as hybrid cars and electric vehicles costs you more for repairs. The additional safety, navigation, computerized systems in modern vehicles are expensive to repair or replace as they are based on recent technologies.
Sometimes insurance companies alter their rates and roll out new payment plans. You need to evaluate and compare plans to choose the one that meets your needs and payment capacity. On rare occasions, insurance companies tend to make a mistake. So when you are in doubt, it is prudent that you review the factors related to pricing with your insurance representative.
We hope that now you have a better understanding of the reasons behind your rising insurance costs. Let us know if we can answer any questions you may have in the comments section below.