What Causes Auto Insurance Rates to go up the Most
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Inflation affects all of us, from essential grocery items like bread and milk that go up just about every year to soaring housing costs. Many people’s wages just can’t keep up with the rising costs of everyday products and services. Unfortunately, this also applies to car insurance, with many people paying over $1,500 annually for coverage per vehicle. Many things cause rates to go higher. Let’s focus on what causes auto insurance rates to go up the most, so you can avoid them. Save hundreds on automobile ins with a free quote from good2go insurance online.
People get frustrated when their essential bills go up each year for the same exact service. This is especially true in the automotive insurance industry. People know they cannot avoid getting their car covered because it is the law in nearly all states. One of the things that frustrate policyholders the most is rising premiums at renewal time. Cost increases are seen by many as insurers taking advantage of customers and price gouging.
Let’s focus on the actual reasons why a policy may go up 5% or even 10% a year. While a person might want to blame the car insurer, the fault usually lies with them. When you understand that you may be responsible for your coverage costs going higher, you might not be so angry with the carrier.
When reduced to its most basic point, insurance is a company charging you for the perceived risk you pose. As your risk goes higher, so will your bill. Think about it this way: if insurers never rose rates on risky drivers, they might all go bankrupt as they settle expensive claims. Automobile insurance firms take the money you send in as premiums and invest it. They hope that the claim costs in a given year will be less than the money taken in from premiums and the return on the money invested. These are, after all, profit-seeking entities, and they raise policy costs to maintain their margins. If you become a risky motorist, you will be paying more for ins, so it’s essential to keep a clean record.
* More than one at-fault accident
* A DUI or Driving under the influence offense
* Moving to a high crime area where vehicles are frequently stolen
* Adding a teenager onto your policy
* Having more than one moving violation
* Getting a reckless driving ticket
* Having a poor credit
As they are based on risk, auto insurance policies will almost always go up if you get into accidents and get multiple infractions. Some providers like Allstate have accident forgiveness policies, but these are inherently more expensive, to begin with. In other words, you will be paying more to get your car covered to have this extra protection, so it might not even save you money at all.
Your driving record is kept with your area DMV, and the insurers have legal access to check it. When you have a horrible record full of accidents you caused and speeding tickets, you are going to be paying more for a policy. There is no way to avoid this fact. So, it is imperative to obey all the laws on the road and avoid getting any tickets. If you do get one, go to traffic school, so it does not stay on your record. It might be a little inconvenient in the short run, but you will be glad you did because your rates will not go up as much.
It might seem unfair, but your premiums might increase if your car was stolen, and it was not even your fault. You can also have them go higher if your vehicle is burned in a fire. Insurers look at these activities as partially responsible by you. They will adjust your costs of coverage up because you will be tagged as a riskier driver.
Another often overlooked reason for a rate surge is getting arrested. Auto insurance companies associate this with risky behavior, even though it is not directly related to driving an automobile. The same holds for your credit score. The lower it goes, the higher your cost of coverage. Keep an excellent credit rating above 700, and you will get cheaper automobile ins. Of all the things discussed here, the two things that cause auto insurance rates to go up the most are DUIs and at-fault accidents. Never drive intoxicated under any circumstances, not only for your well-being but the safety of everyone else that is sharing the road with you. Also, do your best to avoid any at-fault accidents. Get a free Good to Go insurance quote online and save up to $550 today.