5 Ways Your Car Insurance Rate Can Go Up
Everyone knows that an accident or speeding ticket can make your car insurance rates increase. What many drivers do not know, is the multitude of other factors that can cause you to pay more for coverage.
We have compiled a list of 5 things to look out for and be aware of to make sure you don’t face a rate hike any time soon.
1. Insurance Companies Change Rates
Your insurance company is running forecasts all the time to try to figure out how much they will need to pay out in the coming months and year. They also look at trends in your area.
If, for example, there have been a high number of claims in your area recently, your rate can go up even if you are a safe driver and have made no claims. Factors such as inflation can also play a role in a rate increase.
As mentioned above, location based trends play a large role in insurance prices. In addition, state governments regulate and deal with auto insurance differently. Different states may not allow insurance companies to take certain factor into account when setting rates and the states have to approve new rate plans for drivers in the state. For these reasons, insurance prices can be adjusted for moving to another state or even moving to a different zip code.
3. Credit Changes
Your credit score can affect you in a number of ways. If you have negative information on your credit report due to missed or late payments, an account in collections or taking on too much debt, your car insurance rate might go up.
It may not make sense at first, but the insurance company’s job is to figure out how much of a risk you are to insure. If you have a bad credit score, it could be a red flag for the insurance agency and they could charge you more as a result.
4. A New Car
The make, model and year of your car has a lot to do with how much you will pay a month. A new 2 passenger sports car will cost you a lot more a month than a minivan. The insurance company knows that different cars attract different types of drivers and the repairs on some can be substantially larger than others.
5. Loss Of A Discount
Insurance Discounts come in all shapes, sizes and durations. If one of your discounts has expired or gone away for another reason, you will pay more every month. You may currently be getting discounts you didn’t know about for a variety of reasons such as bundling policies, a lack of claims, clean driving records or driving low miles in a year. If something changes, you could end up paying more.
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