Why is my car insurance so high?

Everyone’s feeling the squeeze lately. However, one of the essentials for any motorist is, of course, a reliable car insurance package from a recognized carrier. However, the rates we’re all paying for car insurance are only going up and up.

Why is my car insurance so high, you might ask – and honestly, I’m right there with you. While rates seem to be increasing for everyone right now, there are also a few reasons why your rates, specifically, are soaring above what you might expect.

Let’s take a look at why your car insurance isn’t getting any cheaper, and what you can potentially do about it. 

Is car insurance expensive for everyone?

The long and the short of it is, yes, car insurance is certainly getting more expensive for most motorists across the US. In fact, data shows that our premiums are increasing by around 8.4% on average this year, a huge leap compared to hikes we’ve experienced since 2017.

That said, the amount you pay for car insurance will differ from the next motorist based on where you live! It’s thought that you’ll pay 168% more than the average US driver in Michigan, for example, with Florida and Rhode Island not too far behind. (For reference, if you really want to save money based on location, look at moving to Vermont, Maine, Idaho, Wisconsin, or Indiana)

The fact remains that car insurance will always increase a little. It’s an evergreen problem that largely spikes thanks to economic problems such as inflation growth.

That said, there are still individual reasons why some people pay more for car insurance than others. It’s not just a zip code lottery!

What’s causing my car insurance premiums to spike so much?

Unfortunately, even your demographic can affect how much you pay in the long run on auto insurance. Therefore, it’s always worth checking your yearly statements to make sure you’re getting the best possible deal, and watching how you use your car in case that’s having an effect on your premiums.

Let’s take a look through some of the most common reasons why your car insurance is so high this year.

You’ve had an accident

Here’s where things seem a little unfair, at least at first. Understandably, if you get into a collision or accident that’s proven to be your fault, you can always expect your insurance rates to go up.

However, car insurance carriers may also choose to boost your premiums if you get into accidents that aren’t your fault. This isn’t the case across all of the US, so do make sure to check your state laws and the information in your insurance documentation.

The reasoning behind this type of rate increase is that a carrier might deem you’re at risk of another accident regardless of whether you caused it or not.

My advice? Check fault and not-at-fault clauses before you set up any new insurance contracts

You’ve received tickets

Yes, you can even expect your insurance rates to increase if you’ve been on the receiving end of a speeding ticket or two. The more tickets you get, the more likely your carrier will think you’re liable to cause accidents.

You’ll also see your insurance prices increase if you’re found guilty of a DUI (driving under influence of alcohol or drugs). Naturally, drivers with DUIs are assumed to be more likely to cause accidents on the road – and insurance carriers will hit back hard with inflated rates.

The best course of action, therefore, is to simply stick to the laws of the highway. Try and avoid parking violations, and it goes without saying that you should never drink and drive, or drive under the influence of mind state-altering drugs.

There are lots of claims in your area

Here’s where things start to seem a little unfair again. In some states, insurance carriers may inflate pricing if there has been a spate of, or increasing rates of, claims made in your local area. 

These claims can be completely beyond your control. Accidents close to you may occur due to faulty traffic provisions, wild animals crossing, malicious spates of vandalism and theft, or even weather damage.

Ultimately, an insurance carrier will decide whether or not it’s risky for them to take on a customer who lives and drives in an area where lots of claims are occurring. From their perspective, it’s understandable that they’d use local data to try and build a bigger picture of local roads.

You’ve changed your details

In rare cases, insurance carriers may change pricing if the location of your car garaging (i.e. where you keep your vehicle) alters. For example, you might move home.

The reasons for this, again, could likely revolve around local claims in the zip code you’re moving to. Alternatively, if you’re moving to a whole new state, you might find that you pay more through a completely new application.

You’ve made additions

Always read the policy documents you receive from insurance carriers! In many cases, you’ll receive a fee for adding and removing certain people and vehicles. 

Some of this can be explained away by administration costs set by the carriers themselves. However, there’s further logic behind adding charges if you change your car.

For example, if you upgrade your car from an older Ford Mustang to a Tesla Model 3, you can easily expect premiums to increase. If you have a more valuable or even a more desirable car, then your carrier’s going to charge you more to insure it.

The same applies if you add motorists to your policy. The reason behind this is that your carrier will assess each person they cover. If you add someone to your policy with a history of DUIs, for example, those premiums are going to increase.

You’re young!

The curse of getting insured as a young driver is that you’ll usually pay more for insurance than older drivers on the road. Teenage drivers are often seen as inexperienced and therefore more likely to cause accidents.

However, the same is often true for senior motorists. If you’re over the age of 60, state precedence and insurance carrier rules may decide you’re more at risk of causing accidents once you retire.

Unfortunately, there really isn’t much you can do to shake this perception off without proving to your carrier that you’re more capable than your demographic suggests.

You’re losing discounts

In some cases, you’ll receive discounts on your car insurance if you’re a homeowner, or even if you choose to receive bills in a certain way. Make changes in your life that revolve around these discounts, and you’ll lose them. Nice and simple!

There’s been a big gap in your insurance history

Your insurance carrier is going to want to see that you’ve been covered for your time on the road. If you’ve come off one carrier or are getting back into driving after an extended period off the road, your carrier might not react too kindly.

In fact, without a legitimate or reasonable reason for such a gap in your insurance history, carriers can and will choose to inflate premiums. As always, check the fine print of any agreements you enter into.

You have poor credit

Unfortunately, bad credit can also influence just how much you’re paying each year for car insurance. It’s all the more reason to start taking better care of your credit health, to start paying off debts, and to build a brighter history from today forward.

Do so, and you might even notice your car insurance rates start to decrease! Don’t take my word for it, of course – as these rules can and will vary from carrier to carrier.

How can I stop my car insurance premiums from increasing?

Unfortunately, as you can see, there are always going to be a few reasons why your insurance premiums increase beyond your control. However, the best way to keep your insurance costs low is to try and stay on the right side of the law!

Otherwise, some life changes are unavoidable and will, unfortunately, boost the price you pay for your car insurance. For example, if you need to move cross-country for work, you may find one state charges you more than another for insurance.

What’s more, if you invest in a new car, or you want to help your teenage son or daughter by adding them to your insurance while they learn to drive, you’re going to see your prices increase.

Add this to the fact that insurance premiums are, by and large, increasing across the US, and you have an expensive but necessary puzzle all motorists have to solve.

If you can live in Idaho, drive a small car and avoid tickets and fines, you’ll be keeping your rates to an absolute minimum. Quite how feasible that might be for you – who knows?