March 19, 2024
cdorseyins
Auto Insurance: Why does Car Insurance go up? Blogs
There are many reasons as to why Car Insurance prices can go up. I will list below some reasons you may see an increase:
Technology
Vehicles that are new and loaded with smart technology are more expensive to repair and insure. Examples of complex car components include:
*Back-up cameras
*Navigation Systems
*Distance Sensors
*Electric Motors
*Infotainment Systems
Accidents
This is one most people are aware that an auto accident, as well as traffic violations can increase your auto insurance. Companies have to account for this to make sure that they can accurately match your price to your probable risk based on past events. This could be anything from speeding tickets or a lapse in car insurance. Most of the time, your insurer will refer to consumer reports, including your prior insurance history and your Motor Vehicle Report (MVR) to assess your prior record as they determine your rate. With most companies an accident will stay on your record for 3 years, then at the 3 year mark the “safe driver” discount can be added back on your policy.
Address
Moving can cause a rate change too. Zip codes with instances of high vandalism or high frequency of accidents are greater risk factors for drivers. You might also move to a different neighborhood and see your rate decrease. You can always call in with your new Address and have your Agent get you an estimate on what the price might be.
Economic factors
Certain economic situations such as inflation, can affect insurance premiums. A rise in gas prices, labor costs, or the increasing cost of manufactured goods (even car parts) can cause insurance premiums to change—which is why during economic changes it’s a good idea to refer back to your policy to be sure you have adequate coverage. It can be tempting to remove or lower your coverage to save money, you’ll also want to consider whether the coverages you choose for your policy provide the protection you need in the event of an accident.
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