Did you check your bank statement last month and see an increase in your Auto Insurance rate? Insurance providers typically review policies at the time of renewal, which is when your rate can change for a number of reasons. Some of these reasons may be in your control, like getting a speeding ticket, moving closer to work or adding a teen driver to your policy. However, there are other factors that affect your Auto Insurance rate that may be out of your hands.
Auto Insurance Factors You Can Control
Every Car Insurance company calculates rates a bit differently, but they use certain factors about you to determine your risk. One of the main determining factors is your driving record. For example, let’s say you have a good driving record with no accidents or tickets in the last 5 years. It makes sense that you would be rewarded with a lower Auto Insurance rate. Typically, a driver that hasn’t made any claims is considered low-risk.
On the contrary, let’s say you’re a driver with a recent at-fault accident and/or several tickets on your record. You’ll be viewed as high-risk by insurance providers and therefore have a higher rate. Additionally, if you recently incurred a speeding ticket or other moving violation ticket, your Car Insurance premium is likely to increase at your next renewal when your carrier reviews your policy.
Other common factors used to determine your risk-level are driving experience, marital status, annual mileage and the type of car you drive. As you can see, many of these factors are within your control, not your Auto Insurance company’s.
Why Does An Auto Insurance Company Increase Rates?
While it’s true that much of your rate is determined by you, there are also some outside forces that affect your premium. Keep in mind that in most states Car Insurance premiums are regulated by the government. If an insurance company wants to increase its rates, then it must apply to the Department of Insurance for approval. Once the application is approved, the company can increase its customers’ premiums.
So, why would an insurance company choose to do this?
Auto Insurance Factors Out of Your Control
You may think that an insurance provider only wants to increase its rates out of monetary greed. However, this is not typically the case. There are many valid reasons a Car Insurance company may choose to apply for premium increases. In fact, the entire country has recently been experiencing industry-wide price increases for the reasons listed below:
Advanced Car Technology
Electric vehicles and advanced safety features are becoming a standard in the car industry. This is great for the environment and passenger safety, but not always so great for your Car Insurance rate. This is because these new complex sensors and computerized components are more expensive to repair if your vehicle gets damaged. That means your Auto Insurance company has to fork out more money if you make a claim.
Pro Tip: Although cars with advanced technology can be costly to repair, many insurance providers offer a discount for vehicles with certain safety features. These may include anti-lock brakes, passive restraints and anti-theft devices. Ask an Insurance Specialist at (855) 919-4247 if your vehicle qualifies for a Vehicle Safety Equipment discount.
Similarly, the cost of medical expenses increases every year. In 2018, the average hospital stay cost over $10,000. Obviously, this cost depends entirely on the medical condition. But think about how much it would be if you got into a severe car accident and your Auto Insurance had to cover it? That expense is what insurance companies must consider when setting premiums.
Pro Tip: A standard Car Insurance policy with only the state minimum requirements does not provide you with coverage for medical expenses. Ask an Insurance Specialist about adding Medical Payments coverage to your policy. It typically doesn’t cost much more per month. Plus, it can save you from paying thousands of dollars in hospital bills if you get into an accident.
Cellphone use while driving has become a huge problem on the roads. Check out these statistics from the National Safety Council:
- Cell phone use leads to 1.6 million crashes every year.
- Nearly 390,000 injuries are caused by accidents where the driver was texting.
- 1 in every 4 car accidents in the U.S. is caused by texting and driving.
Basically, the number of auto accidents is increasing, and Auto Insurance companies know it. They also know that the damage and injuries that occur in these distracted driver accidents are usually more severe. As the frequency and severity of car accidents increase, so do insurance claims. That means your premium is increasing, too.
Pro Tip: This one may be obvious but don’t text and drive. Some phones and mobile apps have car modes that can help you be less distracted while your car is in motion. Texting and driving is not worth the risk of a potentially fatal accident.
So, Can I Lower My Auto Insurance Rate?
Unfortunately, the factors out of your control may make you feel as though your Car Insurance premium increased for no reason at all. However, this type of increase is probably happening to everyone and not just you. Additionally, there are some ways you can lower your Auto Insurance rate to counteract these industry price increases.
The best way to offset an Auto Insurance rate increase is to get a new quote. This will let you know if there are more affordable rates out there with the same coverage. For a fast, free quote, call an AIS Insurance Specialist at (855) 919-4247. Also, don’t forget to ask about discounts you may qualify for. Some to mention are Good Driver, Good Student, Vehicle Safety Equipment and more.
The information in this article is obtained from various sources. This content is offered for educational purposes only. It should not replace the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.