June 14, 2024
Annapolis, US 75 F

Here’s Why Your Car Insurance Rate Increases

As a car owner, motor vehicle insurance is a mandatory part of ownership. It is not just for your benefit but also for that of others.

A car insurance policy will undoubtedly include a rate. It is the rate of premiums that you will pay each month for the coverage.

You need to always be on guard if you want your premiums to remain the same. There are circumstances that can make your insurance rate go up such as:

1.   Traffic Violations

When you buy your motor vehicle insurance policy, your rate will be determined by how you are as a driver. If you don’t have any traffic violations or you are a first-time car owner, you will get the best rate possible. The more traffic violations you incur, the higher your insurance rate increases. Not all violations are equal and there are some violations that will increase your insurance rate more than others.

You may go to court and win the case against a traffic violation which means it will not show up on your record. In some states, you may retake a driving test to avoid getting traffic points on your record or getting your violation reduced or dismissed entirely.

2.   At-Fault Accidents

Getting into a car accident is a horrible experience that can lead to an insurance rate increase. It is especially so if you are at fault for the accident and a claim is filed against you.

There are some car insurance policies that have a clause for a payout if the damages are under five hundred dollars. There are other policies that have one at-fault accident claim per policy where your rate does not increase.

You should always drive safely to avoid being on the losing end of an insurance rate increase. However, you should find policies that have clauses like the ones above.

3.   Comprehensive Claims

It is rare that a comprehensive claim will lead to an increase in your insurance premium rate but it is possible. However, more insurance companies are becoming more strict with their comprehensive claim policies so it is likely it might affect you in the future.

Each insurance company will have a different way of treating comprehensive claims. You should inquire as to whether it will make your insurance rates increase. Otherwise, you may be in for a nasty surprise later. Most insurance companies will only increase your rates if your comprehensive claims exceed a certain amount or if you have multiple claims filed against you.

4.   Getting Older

Age is a crucial factor as it pertains to evaluating insurance policies. Generally speaking, the older you get, the higher the chances of an insurance rate increase. Many car insurance companies consider age to be a liability when it comes to driving much like teenagers. It is understandable as your physical abilities decline significantly as you age.

You may receive some discounts from your insurance company once you reach fifty-five. However, once you turn seventy, your insurance rates will most likely increase.

5.   Insurance Lapses

It is common knowledge that a lapse in insurance is a terrible thing. It will almost certainly lead to changes in the terms of your insurance policy.

If you have a lapse in insurance, you should try and reinstate the policy within a week which is often possible. The longer you wait, the harder it becomes to get the policy with the same favorable terms. However, you will often have to pay a steep fee to get the policy reinstated in addition to any fines assessed by your state.

There are insurance companies with a grace period of about a month for you to pay and reinstate your insurance policy. You should learn the terms of a lapse of your specific insurance policy if you don’t want a hike in your insurance rate.

6.   Credit Score

Living in the United States, the importance of your credit score cannot be understated. It can affect many elements of your life including your insurance policy rates.

Many insurance companies base your rates on your credit score as it implies your ability to pay. If your credit score drops, your insurance rate goes up and vice versa. You should check and see how your credit score affects your insurance policy.

Insurance rates are quite volatile and even small changes can have an impact on it. You should always be apprised of anything that can affect your insurance rate whether increasing or decreasing it.

The factors above are the main ones that can affect your insurance rate but they are by no means the only ones. You should calculate the insurance rate every time you renew your policy. If you address the factors above, your insurance rate should remain reasonably low.


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