Opening your insurance renewal packet can be a scary thing because even if you haven’t made a claim, your rates could still increase. This is because your insurance carrier uses a wide range of factors to set rates. In addition to a minor increase in your premium due to inflation and cost of living, here are some of the other most common reasons why your premium may have gone up when you renewed your policy.
Your insurance carrier has access to driving records in your state and use your history to set rates. If you have received a traffic ticket for speeding or another similar infraction, the ticket could cause your premium to increase. In fact, a traffic ticket can increase your rates even more than a claim, particularly if you weren’t deemed at fault in the claim.
Lower Credit Score
Some states allow your insurance carrier to take your credit score into consideration when setting your insurance premium. In this situation, if your credit score drops, you could find yourself paying more for your home or auto insurance. Therefore, be attentive to paying your credit-related bills on time every month and keeping your balances on credit cards low with respect to your credit limits.
Driving Different Vehicle
The car you drive has a big impact on the rates you pay for insurance. You’ll likely see your premium for comprehensive and collision coverage go up if you switch to a newer, more expensive vehicle or one that is statistically more likely to be stolen. Your liability rates depend more on the extent of the damage that vehicle most often causes in an accident and the statistics on how often that particular vehicle is involved in accidents.
Moved to New Location
Insurance premiums depend largely on where you live, both because of state laws and because of statistics on the cost of auto accidents in that area. For example, you’ll likely see your rates go up if you move from a rural area to a densely populated area because there are more vehicles on the road, and therefore, you’re more likely to get into an accident with one of them. Comprehensive coverage for vehicles also depends on theft and vandalism rates in your area and the type of parking you have available.