THE VARIOUS REASONS THAT CAUSES CAR INSURANCE TO GO UP
If you have been buying car insurance for years, you would know that the price that you had to pay even a couple of years back is no longer the same. If you are thinking that why is my car insurance going up, you need to read on to understand the many reasons that contributes to the hike in car insurance charges. While there are many common reasons for hike in car insurance rates, there are some not common factors as well. By the end of this article, you would be developing a fair idea about all the factors that could be the potential cause behind the rise in your car insurance rates.
The common reasons
There are some well known reasons which cause the car insurance charges to experience a surge. If your car meets an accident and claims the insurance, you can rest assured that the next annual premium that you would be paying would be higher than what you had paid last year. Also, if you get a speeding ticket or violate the traffic regulations in any way, your car insurance would go up next time. So, before you press the accelerator and bust the speed limits, just remember that this thrill ride could cause a higher insurance price if the cops catch hold of you.Another very common reason for your car insurance to go up is the purchase of a new car. The asset value of a new car is much higher than the old one, and thus the insurance charges for that would obviously be higher. The occupation of the owner of the car also serves as a cause. An individual who is doing white collared job would be less risky than the guy who works as a freelancer.
Relocation
If you have relocated to the cities for a semi-urban or rural area, you can expect the car insurance to go up. Likewise, if you relocate to a place which is thickly populated, you are getting yourself exposed yourself to higher insurance charges. The Zip code plays a vital role in determining the insurance premium amount. There are some states which are recognized to have a higher concentration of uninsured motorists, and thus people of these states are required to pay an insurance charge which is much higher than other states of the country. These identified states include Florida, Oklahoma, New Mexico or Alabama.Insurance companies change their rates
Insurance companies tend to evaluate the current market conditions and factor in the current trend of claims while they set the insurance rates every year. If the carrier gets a forecast of sudden economic variation like an inflation or they find too much claims happening in the current fiscal year, chances are pretty strong that they would increase their rates in the next fiscal year, which would have a direct impact on the rates that you would be paying to get the insurance of your vehicle done.The age of the driver
Irrespective of the fact whether you have been a safe driver or have been the favorite of the cops for speeding and violating the norms, your age would play some role in the increase in the insurance charges. The age bracket beyond which the carriers increase their rates varies from carrier to carrier. However, if you are above 50, you may expect some northward movement in the car insurance rates.To add to that, if you are unmarried and do not have kids, your risk factors would be deemed higher than a regular family man. In that case, your insurance company would prefer charging you extra for covering the insurance of your car.
Poor credit ratings
If you have missed out paying one or more installments of your credit card or personal loan, you should not be asking why is my car insurance going up. A missed credit card payment hits your credit scores badly and that leaves a direct impact on the car insurance rates. People with poor credit ratings are more risk prone is the principle that most insurance companies work on. Your insurance company may not tell you upright that it is the poor credit rating which has caused the insurance charge to high, but it certainly was being looked upon by the insurers while they were sending the quote to you.Missed auto insurance
If you fail to renew your existing auto insurance before it expires, you can expect a shocker when you get the bills from the insurance company. Even if the auto insurance has lapsed for a period of 30 days, the renewal charges would be way higher than what it would have been otherwise. If you do not want to ask yourself that why is my car insurance going up, do remember to get the insurance policy renewed well before it expires.Driving extra miles
If you have been driving extra miles as compared to previous years, your insurer will consider that as an additional risk of meeting an accident, as you would be spending comparatively more time on the roads. A higher risk would mean higher insurance rate. The only good news is that if you start driving less, you can also expect the insurance price to go down as well.So, as you think of taking up the new job that would require you to drive for an hour or so daily, be prepared to get a higher quote from your insurance company.
The car insurance has a direct correlation with the risk factors. The higher the risk, the more would be the insurance charges. It is an open secret that the insurance companies want to pay as little as possible, and hence, whenever they feel threatened that particular vehicle is more prone to cause them to pay, they tend to increase the premium rates for that vehicle. While some of these factors are not in your span of control, you can certainly control the other factors which will bring down the risk-meter for your case, thereby causing you to pay less for the car insurance.
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