Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

Full Bio →

Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 17, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance related. We update our site regularly, and all content is reviewed by car insurance experts.

Auto insurance isn't cheap, and some things drivers do can lead to dramatic policy increases.
Auto insurance isn’t cheap, and some things drivers do can lead to dramatic policy increases. (image via flickr.com)

If you’ve recently obtained quotes or renewed your car insurance policy, you might experience sticker shock due to a dramatic increase in your premiums. While many are confused about such increases, there is always a reason for both increases and decreases in premiums.

Insurers are regulated by each state that they operate in, and they have strict guidelines to which they must conform, including the factors they utilize in order to quote and sell a policy.

Insurers don’t care what color of car you drive if you’re a smoker, and they likely will not raise your rates because of a single speeding ticket. So why do they raise rates?

In this article, we’ll be looking at things consumers do that can lead to increases in the policy premiums they pay. That’s right – these are areas where you can control how much you individually contribute to rate increases.

Buying a new car is something drivers do that can have a dramatic effect on their insurance premiums. Beyond the fact that you now may have a more expensive car to insure, you could also see changes in coverage that affect pricing. Your previous car might have been an older model that you carried liability coverage on, but with your new purchase, you’re looking at not only carrying liability but also collision and comprehensive coverage.

Making at-fault liability and/or collision or comprehensive insurance claims can also raise your premiums. For every claim you make, you’re indicating to your insurer that you’re at higher risk than you were before. Additional risk means that your insurer will want to pass the cost on to you, and that will be reflected in an increase in your auto insurance premium. And some insurers will place you into a higher risk category, even if you were not at fault in any way for your claims.

Consider this for an example: You’ve loaned your car to a friend, who promptly wrecks it, causing damage to both your own car as well as the car of another driver. You weren’t driving, but because your policy covers anyone who is legally behind the wheel of your car, that crash will be reflected on your policy, not one carried by the friend who may have their own policy on a car they own.

We mentioned that a single speeding ticket probably wouldn’t cause your insurer to raise your rates, but multiple tickets or more serious moving violations, such as reckless driving or being caught under the influence of drugs or alcohol will likely cause your insurer to raise your premiums. Significant cases can lead an insurer to issue a non-renewal notice, meaning you’ll need a new insurer when your current policy expires, and in extreme circumstances, canceling your policy altogether.

Changes in your credit history can also result in higher premiums. Many insurers utilize credit data, which they do in calculating an “insurance score.” Historical data collected and analyzed over time has shown that that the lower your credit score and insurance score are, the more likely you will be to file a claim.

Adding a new driver to your policy, especially a new teenaged driver, can significantly raise your rates. Conversely, marriage or domestic partnership additions can lead to a decrease, as they will normally offer savings over two individual policies. Because they’re the least experienced drivers on the road, and they’re also more prone to making rash or questionable decisions, teenagers represent an extremely high-risk segment of the driving population – the highest risk segment overall.

Finally, moving to a more urban or high crime area can lead to an increase in your policy premiums. Reality suggests that the higher the population, the more likely an accident or other claim factor (such as vandalism or auto theft) is to occur, hence the increase in rates. Not only is your neighborhood a factor, but even where you park at night contributes to the amount you’ll pay for your car insurance.

If you’ve experienced an increase in your premium, we encourage you to ask your insurer why. Working with them may help you uncover solutions available to you that can lead to lowering your costs, be they new discounts or dropping unneeded coverages. Even if you can come to a workable solution to your situation with your current insurance company, it’s probably a good idea to take advantage of the market and see what other car insurance companies might be able to offer. Our free online quotes can help do that quickly and easily.