Have your car insurance rates spiked recently? Before you blame the insurance company, you may want to consider whether any of the following situations apply to you—they’re the top six known causes of sudden rate increases.
You recently moved
You recently got a ticket or were in an accident
You have not kept consistent coverage
You've started putting more miles on your car
You bought or leased a new car
You are younger and single
What to do about your rates
If you have recently moved and the rate increase occurred after you changed your address with your insurance company, there’s a good chance this was due to the move itself. Insurance rates are determined based on a number of factors, and one of the most influential is where the car is parked at night. If your new town is known for higher crime rates, that could explain the rate increase.
Keeping a perfect driving record is not easy, and most people run into a traffic ticket or other minor violation from time to time. Tickets and accidents automatically get reported to your insurance company and can affect your rates; it may take some time for this to occur, but it is one of the most common causes of a spike in insurance rates.
Some people will cancel their auto insurance in an effort to save money but do not realize that it can come back to bite them when they attempt to purchase insurance once again down the road. If you went even a month without insurance, your company will find out and your rates will be higher as a result.
Cars that are driven more often cost more to insure because they are inherently at a higher risk of being in an accident. If your insurance company recently asked you for an updated odometer reading and it was higher than your expected reading, your rates may have been raised for that reason.
Insuring a brand new, financed car as opposed to one that was paid for in full can be a lot more expensive because the coverage amounts required by law will be higher. Therefore, if you have recently bought or leased a car with financing, you can expect a spike in your insurance costs due to the higher amount of coverage needed.
Statistically, unmarried drivers under the age of 26 are at the highest risk of being in a car accident. Therefore, the younger you are, the higher your rates will be. It is a pain to deal with, but the good news is that your rates should gradually decrease as you get older and continue to drive without major incidents.
Overall, there are a number of factors that can result in higher car insurance rates for drivers. By speaking with your agent, you should be able to determine the cause of your rate increase and perhaps even work something out so that you can enjoy lower rates once again.