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Why Did My Car Insurance Go Up?

So you just received your policy renewal in the mail from your car insurance carrier, and your rates went up, again. You think to yourself: “I’m a good driver and I didn’t get any tickets recently. Why did my car insurance go up?” This is, without a doubt, a very common question. Sometimes the answer is easy to discover; sometimes it can be much more complex. There are literally hundreds of factors that figure into an individual’s or a household’s auto insurance premium calculation. Let’s take a look at some of the most common reasons for an increase in your car insurance.

Across-the-Board Increases

A lot of the time, it’s not about your individual behavior, but about larger trends in factors that drive (pardon the pun) the cost of car insurance. As you’ve probably noticed, price increases are very common for almost every service or product that you buy. It’s not much different in insurance. As the cost of medical care, auto parts and health insurance go up, so does the cost to pay auto insurance claims. In some years, trends in traffic accident frequency or severity can also impact the overall cost of paying claims. Insurance fraud and distracted driving trends can also influence pricing. Insurance providers regularly file across-the-board rate increases with state insurance regulatory agencies, which typically must approve them before they go into effect.

Moving Violations

Sometimes an increase is directly related to your recent driving behavior. Remember that ticket you got 9 months ago? You may have already forgotten about it, but your insurance carrier may have performed a routine check of your motor vehicle record (MVR) on a periodic basis. Receiving a ticket for a moving violation will most likely result in an increased insurance premium. Moving violation examples include speeding, running a red light or making an illegal turn. Also, if your license has been suspended after a DUI charge, you should expect to pay more for your car insurance.

Coverage Changes

Have you added an extra layer of insurance protection? An increase in coverage will almost always mean an increase in rate. Examples of coverage changes may include adding comprehensive and collision insurancegap coverage or increasing your limits on existing lines of insurance coverage. Also, if you add a vehicle, your car insurance rate will generally rise. If you are no longer purchasing your home coverage from the same company that provides your auto coverage, you may have seen an increase in your auto insurance because of a lost “bundling” discount.

Address Change

Your residential address (where you park or “garage” your vehicle) makes a difference to your rate. Even when all other factors remain unchanged, this one factor can trigger an increase or decrease in your bill. Accident frequencies or rates of theft in your zip code can influence rating factors, and oftentimes there are regulatory rules that govern how much price variation between neighboring zip codes is allowed.

Other Drivers on Your Policy

If you’ve recently added any new drivers to your existing auto policy, especially a young, newly licensed driver, you will have received a corresponding increase. Remember, also, that any new moving violations charged to other drivers listed on your policy will factor into your renewal premium. In fact, any number of rating factors that can change for you personally can change for others in your household and/or on your policy.

Coverage Lapse

If you miss a car insurance payment you may have allowed your insurance to expire. This is referred to as a “lapse” in coverage. Whether your lapse in coverage occurs due to non-payment or for some other reason, you should expect that most carriers will consider you to be in a higher risk category and charge you a higher premium.

Change in Credit Score

You’re not perfect. Even people with the highest credit scores are sometimes late on a loan or credit card payment. However, if your credit has taken a hit recently, and your score has recently dropped, your insurance premium can be impacted. Some aspects of your credit are known to be predictive of auto insurance risk, and Pennsylvania allows carriers to use credit scores in their rate calculations.

Recent Insurance Claims

Have you filed a claim in the last policy period? The rate you pay for coverage will most likely be impacted if you’ve had a claim related to an at-fault accident. Even if your claim was not necessarily your fault, you may still see a rate increase. For example, if you got stuck in a hailstorm on the way home from work, your comprehensive coverage will generally cover the cost to repair the damage, but depending on your carrier, your car insurance may still go up. Your likelihood to file a claim and your exposure to risk external to your own driving record or driving skill are both important to your premium calculation and can trigger a higher rate. 

Short-Term Discounts

The auto insurance industry can be very competitive and many carriers will offer “new business” or “new customer” discounts to incentivize drivers to switch carriers. You could have received one or more discounts as a new customer that only apply for a limited period, like your first policy term. Some discounts may apply longer but reduce over a given time period.

Final Thoughts on Why Car Insurance Goes Up

If you’re still scratching your head about why your car insurance rate just increased, it may be time to consult with a licensed insurance professional. Consider Plymouth Rock Assurance. In addition to exceptional customer service and industry-leading claims handling, Plymouth Rock offers competitive pricing and exclusive discounts to members of professional and alumni affinity groups in PA. Get the coverage you need at a rate you can afford. Call Plymouth Rock Assurance today!          

Plymouth Rock Assurance and Plymouth Rock are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. Auto insurance in Pennsylvania is underwritten by Palisades Insurance Company. Each company is a separate legal entity that is financially responsible only for its own insurance products. Actual coverage is subject to the language of the policies as issued by each separate company.

Call 855-993-4470, get your free quote online, or find an agent to learn more about 5 ways to sell your car faster. Visit our contact us page if you need to call us with additional questions.