Here Are 5 Reasons You’re Paying More for Car Insurance
Car insurance is a necessity that you can’t live without when you own a vehicle. But when you’re shelling out more than you want to for your policy, it may be time to look at factors that are making your rates higher than others.
You Added a New Driver
It’s no secret that teenage drivers cost more to insure. If you have a child in your household who was recently added to the policy, your premium will likely go up. This typically occurs in the form of a partial increase if you add the driver partway through the term of the policy, but the full increase often happens when you renew. Adding another car will also increase the cost of your policy.
You Moved Recently
You may not realize it, but your new zip code could be a factor in why your auto insurance rates just went up. In highly-populated cities, the number of car accidents is higher, making it more expensive for your company to insure your vehicle. This factor will be especially shocking if you move from a small town, where the cost to insure a car is often quite low, to a big city like Los Angeles, New York City, or Chicago. When you move to an area with a higher number of reported thefts, burglaries, and break-ins to vehicles, you’ll probably see an increase in your monthly cost as well.
You Bought a New Car
An insurance policy protects the overall value of your vehicle should something happen to it, so it’s logical that a more expensive car will cost more to insure. When you replace your current vehicle with something different, you’ll probably notice a hike in premiums. Certain factors may also impact the cost of your car insurance, such as an expensive audio system or high-end tech features within the cabin. If your car doesn’t have certain safety features, you might also end up having a higher bill each month.
However, the myth that red cars cost more to insure? Not true. You don’t need to worry about shelling out extra money for insurance on your flashy, ruby-colored sports car solely because of the paint job, but it will probably cost more to insure than an entry-level sedan.
You Made a Claim
When you make a claim on your auto insurance, the rate will generally go up to accommodate for the payout. The one exception to this could be if you’re in an accident for which the adjuster determines you are not at fault.
You Have Poor Credit
When you submit a request for an auto insurance quote, the company will typically pull your credit report and use the information to determine the insurance score. That score impacts the rate of your car insurance. Many insurance companies believe that credit can offer helpful insight into the likelihood of future claims and accidents. If your credit changes suddenly, due to bankruptcy, defaulting on a loan, or other financial factor, your insurance rate could go up.
Shopping around to compare rates, improving your credit score, and choosing your vehicle carefully can all help you qualify for a lower cost of car insurance.