It’s not uncommon. Your car insurance bill has increased out of nowhere, and you’re not sure why.
This is a common complaint in the auto insurance industry. There are many factors that insurance agencies have to take into account that affect your rates. Here are some common explanations for why your premium may have gone up, and what you can do about it!
Factors Affecting Auto Insurance Premiums
- An accident or ticket: the risk associated with covering your car increases with prior incidents.
- Purchasing a new vehicle: the higher the value of your car, the more cost to protecting it.
- Moving homes or workplaces: the area you live in or the distance of your regular commute can change your risk, thus increasing your premium.
- Adding other drivers to your policy: new drivers might mean increased risk and higher liability, especially if the new driver is younger or has a record of incidents.
- Inflation: an increase in the value of your car or the cost of services to repair or replace it can lead to an increased premium.
- Insurance Fraud: even if you have not experienced insurance fraud yourself, an increase in fraudulent claims affects the industry overall. This can affect your rates, as fraud is very costly for insurance companies.
Lowering Your Premium
- Drive cautiously, smartly, and safely: avoid expensive claims and reduce your risk.
- Bundling Policies: hold more than one type of policy with the same insurance company. There is often a multi-policy discount.
- Raise your deductible: this will allow lower monthly payments, but in the event of an accident it would increase out-of-pocket expenses. It is a balance of risk–paying less monthly, but more in the event of a claim.
- Decrease your coverage: the less coverage you receive for your vehicle, the lower your premium. This is also a balance of risk, as you will be more personally liable for any damages.
- Look for discounts: discounts may be available for a variety of circumstance. Some of which include good grades for students, attending an approved accident-prevention training course, paying your full premium up front, an age of 55 or older, and being retired from a full-time job.
- Talk to your agent: we are here to help! As knowledgeable policy experts, we would love to discuss your specific circumstances and find a policy that works for you!
At Henry Insurance Service, we want to ensure that you have the right insurance policy for you and your family! It is important to ensure you have the most cost-effective price for the coverage that meets your needs. Call one of our agents today to talk about what insurance policy is best for you!
