A skyrocketing car insurance rate can often be traced to a car accident. However, several other factors can make your premium jump like the speedometer on a Maserati. A bad driving record and the kind of car you drive can make for steep rates as well; even your credit rating and the neighborhood in which you live are reflected in the price you pay for car insurance.
A car accident, even one that isn't reported to your insurer, can affect the amount you pay in premiums. Some drivers believe there is no adverse financial effect from a "no fault" accident or one caused by an uninsured driver, this is untrue. No matter who is to blame or what the cost of the damage, any car accident adds to the total picture of you as a driver. Several small accidents will ultimately cause your insurance company to place your policy in a high-risk pool, or even lead to cancellation of the policy altogether.
Traffic tickets and being considered a high-risk driver are other reasons for an exploding car insurance rate. Moving violations, such as blowing through a red light or speeding in excess of 15 mph, will tack hundreds of dollars a year onto your car insurance premiums. Extreme recklessness, such as driving under the influence, may make it impossible to get car insurance through a mainstream insurer. Companies that will insure reckless drivers with numerous tickets charge thousands of dollars above standard rates. Many states also require additional coverage for high-risk drivers. Drivers ticketed for driving without insurance will also see their insurance costs go up. Uninsured drivers who are involved in car accidents are usually required to have financial responsibility riders on their policies; these riders can be expensive and are a lasting detriment to future insurance coverage.
Many people are unaware that their credit history is taken into account when pricing an insurance policy. Drivers with bad credit will generally be required to make larger down payments on their policies. And, most drivers do realize that the make and model of their cars have an impact on their premiums. However, a common misconception is this only affects fast sports cars. Thieves target many moderately priced cars because their parts are in high demand. The Honda Civic and Honda Accord, Toyota Camry and Ford F-150 truck are the most popular vehicles amongst car thieves and as a result they can carry higher insurance premiums. Living in a neighborhood where cars are frequently stolen can also be a strike against you when shopping for affordable car insurance.
So beware. A variety of factors may be at work if your car insurance rate goes through the roof.
