Why Does My Car Insurance Keep Going Up? (2024)

Many factors influence car insurance rates, some of which you can control, like your driving record and credit score, and others you can't, such as state laws and your ZIP code. These rates are often reviewed when it's time to renew your policy.

If you notice an increase, you can talk to your insurer or even switch companies. You can also save by bundling policies, requesting discounts, or choosing a higher deductible.

• Why Car Insurance Rates Go Up
• Why Car Insurance Increased in 2023
• What to Do When Car Insurance Rates Go Up
• How to Save on Car Insurance
• Frequently Asked Questions

Key Takeaways

Why Car Insurance Rates Go Up

It's common to see a change in your car insurance rates when it's time for policy renewal.

Your insurer takes this opportunity to reassess your risk level by checking various records. They consult with the Department of Motor Vehicles (DMV) to see if you've had any lapses in insurance, received any tickets, or committed any moving violations. Additionally, your insurer will check your credit score; a decline since your last assessment could result in higher premiums.

While some factors are out of your control, like state laws, you can still work on maintaining a good driving record or improving your credit score to lower your future premiums.

Why Car Insurance Rates Go Up

Your driving record is like a report card of your behavior on the road. It keeps track of any tickets you've received, accidents you've been involved in, and other traffic violations. The more points you accumulate on this record, the higher your insurance rates will likely be.

The average cost of car insurance spikes depending on the severity of your violation:

• With a speeding ticket: Your annual rates increase by 24.7% or $260 on average.
• After an accident: Your annual rates go up by 46.2% or $487 on average.
• With a DUI: Your annual rates soar by 76.6% or $808 on average.

For instance, in the table below, a person aged 30 to 59 with a clean driving record would have an annual premium of $1,054, while a person with a speeding ticket would have a premium of $1,314 ($260 higher).

Browse the table below to find out how a violation affects rates in your state.

Please note that the data below is based on a 40-year-old male driver.

The cost of car insurance can differ significantly from state to state due to factors like population density, minimum insurance requirements, and the typical cost of car repairs, as well as weather-related risks such as hurricanes or hail.

The average cost of car insurance in New York can vary by borough, depending on where you park your car overnight.

View the table below to see the annual and monthly premiums for each state.

Insurance companies evaluate the risk of covering you and anyone else you add to your policy. This generally includes all household members who could potentially drive your car.

If your household includes a teen driver or someone considered high-risk, adding them to your policy will likely cause your rates to increase. However, if there's someone you don't want driving your car, you can talk to your insurance company about listing them as an "excluded driver." This means your policy won't cover them, and it won't affect your rates.

Despite the initial sticker shock of adding a teen driver to your family policy, it's usually the cheapest way to get them insured, as indicated in the table below. As your teen gains more experience and maintains a clean driving record, you can generally expect their insurance rates to decrease over time.

To ensure you're getting the best deal, shopping around for insurance every year is a good idea. Look for companies that offer the cheapest car insurance for teen drivers; doing so can result in significant savings.

Location plays a crucial role in determining your car insurance premiums.

Even within the same state, rates can vary by ZIP code. Insurance companies consider collective risk, meaning if your area has high rates of accidents and violations or if more people in your ZIP code have filed claims, you're more likely to face higher insurance costs. Changes to accident and violation rates in your area can also lead to adjustments in your premiums.

Qualifying for car insurance discounts can help you save significantly. However, it is possible to no longer be eligible for the discount at the time of your policy renewal.

For example, a college student who has graduated and returned home may no longer be eligible for a distant student discount. A driver recently been in an accident may also lose their safe driver discount.

Always check with your insurer to see if you still qualify for these discounts and inquire about other car insurance discounts that may be available to you.

Regarding car insurance, average rates by age and gender can tell you a lot about how much you're likely to pay.

Young drivers, particularly males under 25, usually pay more due to a higher perceived risk of accidents. However, after 25, gender has less influence on your rates. There is no specific age when car insurance starts to go down. Instead, as you grow older, your rates are more affected by your driving history and experience.

Rates generally decrease with age, reaching their lowest around 50. However, both teenagers and seniors often face higher rates because they're considered riskier drivers.

Why Car Insurance Increased in 2024

More accidents

When COVID-19 hit, car insurance companies gave back $14 billion, thinking fewer accidents would occur. But as things opened up, not only did accidents happen more often, they also got worse. Even the number of deadly accidents increased. This has made insurance companies adjust their rates higher.



Parts and labor get pricier

Fixing a car is more expensive now because the parts and the labor to install them cost more. Insurance companies must raise their rates when these costs rise to keep offering the same coverage.



Slim profits for insurers

The car insurance business isn't making huge profits. They measure their success with a "combined ratio," which needs to be under 100% for them to make money. With the current trends in accidents and costs, rates will likely keep increasing.



Inflation hits insurance too

The rising cost of living affects everything, including insurance. If insurance rates don't go up to match these rising costs, companies could run out of the money they need to pay out claims.



See Also

How Moving Affects Your Auto and Homeowners Insurance

Risky driving and legal costs

Bad driving habits like speeding or driving under the influence are on the rise. When accidents happen because of this, legal costs can increase, especially in severe cases. This also pushes insurance rates higher.

What to Do When Car Insurance Rates Go Up

Review your policy

The first step is to understand why your rates have gone up. Check your policy details and consult your insurer for clarification.



Contact your insurer

Sometimes, a simple phone call can explain why your rates increased. You can also inquire about any new discounts you may now qualify for.



Re-evaluate your coverage

If your lifestyle has changed — maybe you're working from home now and driving less — you might not need as much coverage as you did before. It’s also a good time to consider usage-based insurance programs.



Increase your deductible

You can often lower your premium by agreeing to pay a higher deductible in the event of a claim.



Bundle your insurance

If you have multiple types of insurance policies, bundling them with a single insurer can often result in a discount.



Check for discounts

You might be eligible for new discounts, like a good driver discount if you've been accident-free for a certain period or discounts related to a new job or retirement.



Adjust payment plan

Some insurers offer a discount for paying your premium lump sum rather than monthly installments.



Remove unnecessary add-ons

Features like rental car coverage or roadside assistance are often optional. Removing them can lower your premium.



Consult an insurance broker

If you're having trouble finding a better rate on your own, a broker can help you navigate the market.



File a complaint

If you believe the rate increase is unjustified and discussions with your insurer have not resolved the issue, you can file a complaint with your state's insurance department.



Switch providers

You can always switch to a different insurer offering better rates. Just make sure to understand any fees associated with canceling your current policy.

To save on car insurance, consider shopping around for quotes, bundling insurance policies, and asking for discounts you may qualify for. Other strategies include increasing your deductible, maintaining a good driving record and opting for annual payments.

Frequently Asked Questions