Reasons Why Car Insurance Premiums Increase

Insurance companies like to keep their business. If they raise their prices on you without any obvious reasons, you will naturally be looking around for other deals. Most, if not all insurers will bill you more on renewals on some very solid grounds. In no particular order, here are some of the top reasons why car insurance may be costlier.

You have a less than perfect driving record

Insurers will usually check your driving record on policy renewals. If you have been at-fault in an accident, whether or not you live in a full-tort state, you will be billed more. If you have received several points in the previous year you may expect a slightly higher premium. Tickets count too: as a rule, if you are in the 18-25 age group and have received one ticket in the past year, or 25+ and got two or more, your premium will increase.

You have gone over the allotted mileage

As a rule, the more you drive, the more your insurer will bill you. This is common sense once you get to think about it – a driver who commutes to work every day, five days a week and crosses major interstates and highways is much more prone to being involved in an accident than one who drives every weekend to the local supermarket.

You have replaced an old vehicle with a newer or more expensive one

Rule of the thumb says that the older/cheaper the vehicle, the less you have to pay for insurance. If you have switched from your ancient Ford to a shiny new BMW your premium will be substantially higher.

You have added people to your policy

Adding new drivers to your insurance policy usually raises the insurance costs, as the risks usually multiply. This is especially true when it comes to young and inexperienced drivers, as they are much more likely to be involved in an accident due to reckless driving than a grown-up.

You have increased your coverage limits

Increasing your coverage limits and/or adding new packages to your old policy will naturally increase the costs. If you decide upon renewal that you need, let's say, rental or towing insurance then expect to reach deeper into your pocket.

You have re-located to a high risk area

If you have lived in a quiet village where all roads go along corn fields and now moved downtown Manhattan then you will be billed more. Large metropolitan areas with a high car density are regarded as high risk, since that's where accidents usually happen. The odds of having an accident in the countryside are substantially lower.

You have changed the usage of your vehicle

Switching the declared usage of a vehicle from 'pleasure' to 'commercial' or 'work' will also increase your premium since this basically means you will be using it more, hence the risks of being involved in an accident.