Finance Globe

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Are You Familiar with these Reasons for a Car Insurance Rate Increase?

Are You Familiar with these Reasons for a Car Insurance Rate Increase?

Wouldn’t it be nice if your car insurance rate remained the same, year in and year out? Unfortunately, you’ve probably come to find that this isn’t the way things work.

There are some obvious reasons for a car insurance rate increase, such as an at-fault accident or receiving a moving violation. However, there are other reasons for this that fly under the radar.

Consider these two points:

1. Life Changes

Many drivers overlook the fact that basic life changes can greatly impact the cost of car insurance.

For example, adding a new driver to your policy could lead to an increase. Along with this, buying a new vehicle, one that is more valuable than your current one, will have the same effect.

Other things to consider include:

•    A change in your credit score
•    A change in your commute (longer drive to work)
•    Moving to a new location

If you make any of these life changes, it’s possible that your car insurance rate could increase.

2. Inflation

This has nothing to do with you, but it can definitely impact how much you pay for coverage.

As costs rise, car insurance companies have no choice but to charge you more for coverage. This may not be something you want to hear, but inflation is real. Think about it this way: does a new car cost as much today as it did in 1985? Of course not.

Car insurance companies will adjust their rates to keep up with inflation. Unfortunately, there’s nothing you can do about this.

Conclusion

If you have received notice of a premium increase, it may be related to one of the details discussed above. But you don’t have to simply pay your bill and move on. You have the right to contact your provider to ask questions, learn more, and determine if there’s any way to save.

Do you have any advice for saving on the cost of car insurance? Share your thoughts in the comment section.

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Comments 1

Frank on Friday, 26 August 2016 13:13

You are right about the change in commute. I got a new job recently where my commute doubled. I unfortunately found out my insurance went up 25%. I was not pleased at how they handled it so I was able to find another provider for less than what I would have had to pay if I stayed with the insurance provider.

You are right about the change in commute. I got a new job recently where my commute doubled. I unfortunately found out my insurance went up 25%. I was not pleased at how they handled it so I was able to find another provider for less than what I would have had to pay if I stayed with the insurance provider.
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