Reasons Your Car Insurance Cost Can Increase (Without a Crash or Ticket)

You might consider yourself a good driver, and with no moving violations or crashes on your record, you have some data to back that up. So if you recently discovered that your car insurance premiums …


You might consider yourself a good driver, and with no moving violations or crashes on your record, you have some data to back that up. So if you recently discovered that your car insurance premiums have increased, you’re probably wondering why.

As it turns out, there’s more calculated into your premiums than just your driving history. There are many different reasons your rates may increase. We’ll explore some of those reasons, including how a change in ZIP code can impact car insurance rates and why adding a new driver to your policy could change your rates.

How Driving History Affects Insurance Premiums

Your driving history is one of the most significant factors that go into your car insurance premiums.

Traffic Violations and Insurance

How much difference a speeding ticket will make on your insurance rates will depend on where you live and who your insurance provider is. For example, speeding tickets below a 10 mph threshold don’t get reported to insurance in some states. Even several of those tickets won’t impact your insurance premiums.

That’s not the case everywhere, though, so as a general rule, you can expect that the more traffic violations you incur, the more points you’ll receive on your license and the higher the rates you’ll pay for insurance.

Your insurance rates increase following moving violations because you’ve demonstrated less-than-safe driving behaviors, which increase your risk of getting into a crash and filing an insurance claim.

Crashes Increase Insurance Rates

Insurance companies stay in business by taking in more premiums than they pay in claims. And statistics show that people who have been in an accident are more likely to be in another one. If you’ve had a crash, you can almost guarantee higher insurance premiums.

Some insurers offer accident forgiveness programs, and if you add that to your policy, you won’t see an increase in rates following one accident, but if you have two or more accidents in a set period, your accident forgiveness policy won’t help you.

Driving Under the Influence Impact Raises Insurance

A DUI on your record will have one of the most significant impacts on your car insurance premiums. Drunk drivers tend to become repeat offenders, and driving drunk puts you at extremely high risk for involvement in an accident.

Some insurers will drop customers who have a couple or more DUIs on their records because the risk of insuring them is too high.

Other Factors that Impact Car Insurance Rates

Driving history and its impact on car insurance rates makes sense. But you may be wondering why how some of the following factors could be related to car insurance premiums. As it turns out, in most cases, if an insurer can prove with statistics that something in a customer’s life correlates to their risk of filing a claim, they can use that factor to base their premiums.

Adding a Driver Changes Premiums

It makes sense that adding a new driver to your policy will affect your rates because new drivers come with their own set of risks. For example, if you add your teen to your policy, you can expect much higher premiums because teens are in the age category most likely to file a car insurance claim.

Even adding a non-teen driver will affect your premiums. If their driving record is similar to yours, that change could be minimal, but you’ll pay higher premiums if they have a history that indicates an increase in risk.

Age Affects Risk

Teen drivers pay the highest car insurance premiums because they pose the most significant driving risk.

There are many things teen college students shouldn’t do, and one of them is to drive recklessly. By the time a teen reaches college age, they could build a safe driving record and start paying lower rates, but they won’t have the option if their driving record indicates unsafe driving habits.

With a good record, by the time you reach 25 and through your middle-aged years, your insurance rates tend to decrease and then level out.

As long as you don’t do anything to change your risk drastically, you probably won’t experience a significant premium hike until you reach your senior years.

Once you get into your 70s, your risk of getting in a crash increases, so you can expect to pay higher insurance rates.

Credit Score Relates to Rates

This factor may have you scratching your head. How could credit score affect insurance rates? It makes sense that your credit history would make a difference when getting a loan, but there are other things you may not realize about your credit score.

It may seem like a stretch, but insurance companies can statistically prove that people with lower credit scores are a greater risk for insurers.

Some states have banned factoring credit scores into insurance rates, but this is common practice in most places, regardless of whether you agree.

Gender Makes a Difference in Premiums

You’ve already seen how age affects insurance premiums and that teens pay the highest rates of any age group. You’ll also see the highest rate discrepancy between genders for those who fall into the teenage bracket.

Teen boys pay higher rates than teen girls, and there are plenty of statistics to back up this practice. For example, teen boys are more likely to be involved in unsafe driving behaviors and crashes than teen girls.

In a few states, despite the overwhelming evidence that teen males pose a higher risk to insurance companies than teen females, the inclusion of gender into car insurance rates is banned.

Once you reach middle age, rates tend to be comparable between genders, no matter where you live.

Inflation and Insurance Rates Are Connected

There’s no escaping this one. Insurance rates have to increase with inflation, or insurance companies won’t be able to stay in business.

When significant inflation occurs, you can assume you’ll face higher car insurance premiums.

Vehicle Make and Model Used in Insurance Formulas

There are several reasons the make and model of your vehicle will make a difference in your car insurance premiums. One of those reasons is that some vehicles are more likely to be involved in accidents. For example, people driving sports cars tend to drive faster and increase their risk.

Another reason is that some vehicles are more or less likely to prevent injuries in a crash. A newer vehicle with the latest safety features will keep you safer than an older, smaller coupe.

And a third reason is that some vehicles cost more to repair and replace. Expensive cars tend to cost more to insure than cheaper cars.

ZIP Codes Make a Difference in Insurance Risk

Like using credit scores to formulate insurance rates, factoring your ZIP code into your rates is a practice that’s hotly contested.

Some people call it discrimination. Insurance companies claim higher risks occur in some areas than others.

Sometimes moving a block over could impact your insurance rates because you moved ZIP codes. But like it or not, it’s one of the factors used in car insurance rates, so if you recently moved, you can expect a chance in your premiums for the better or worse.

Now that you know some of the factors that impact your insurance rates, you might be able to do something to reduce your risk. Here are some ideas for lowering your insurance premiums.

  • Drive carefully, so you have a clean record.
  • Compare vehicle insurance premiums before deciding on a new vehicle.
  • Increase your credit score.
  • Move to a ZIP code with lower insurance risk.

And don’t forget to compare car insurance rates regularly to make sure your insurer is the best fit for your situation. If not, it may be time to switch.

Melanie Musson writes and researches for the auto insurance comparison site, She’s passionate bout helping others understand their insurance needs and how the right policy can protect their current and future financial stability.

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