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Why Does My Car Insurance Go Up?

January 26, 2022 Auto Insurance

If you’re suddenly surprised by a rise in your car insurance premium, you may be wondering why your rates went up. There are, of course, obvious reasons, such as being at fault in a car accident or getting a couple of speeding tickets.

However, there are other factors that could cause an auto insurance company to deem insuring you a higher risk. In this article, we’ll review the nine most common causes of a rate hike. 

9 Reasons Car Insurance Companies Raise Your Rates 

Depending on the state you live in, insurance companies are bound by different rules. For example, in most states, a drop in your credit score can lead to an insurance company increasing your premium. This practice is outlawed in Michigan, but there are multiple other factors that can impact your rates, including the following nine. 

1. You Received a Traffic Violation

While it’s common knowledge that a traffic violation such as speeding or a DUI will result in a rate increase, it’s important to note that not all violations will result in a change. For example, a parking ticket will not cause your rates to go up.

2. You’ve Been in an Accident

Filing an accident claim logically causes car insurance rates to go up, but you might be surprised to learn that your rates can be increased even if you weren’t at fault. The reason is that your insurance company may still end up having to cover some of the cost of a claim. 

If the insurance company believes that you are more likely than average to be involved in an accident (even though it’s not your fault), they might increase your rates to compensate for the higher risk. 

3. You Bought a New Car

The amount you pay for car insurance often depends on both your driving record and your car. If you get a new car that is worth more money, your rates could go up because there’s a higher cost associated with repairing or replacing parts.

The factors the insurance company will consider in your new rate include:

  The year, make, and model of the vehicle

  The vehicle’s title

  The amount of coverage you purchase

In some cases, you could get a break for upgraded safety and security features, so make sure you discuss these items with your car insurance agent.

4. There Have Been More Incidents or Claims in Your Area

Insurance companies consider a geographic area when determining your rates. Specifically, the volume and severity of claims that occur in a zip code will have an influence on the rates of every resident in that area.

If there has been a significant increase in the following incidents, you could see a jump in your bill:



  Weather-related claims

  Fraudulent claims


5. You Change Your Address

Given that your zip code can influence your car insurance rates, you now know that if you move to another area, your insurance could go up (or down). If you move to a new home in a different zip code, you could see a change in rates.

Even if you stay in the same vicinity, you could still see an increase if there’s been a change to how your vehicle is parked. For example, if you used to have a garage, and now you park on the street, you might end up with a higher bill.

6. You Have Filed Other Claims

Just because you didn’t report an accident doesn’t mean your insurance company will consider you “claim-free.” Reporting theft or vandalism, hitting an animal, or making weather-related claims can all make you a higher insurance risk, leading to a more expensive premium.

7. You Added Another Driver to Your Policy

If you have a teenager who just started driving or you’ve merged house with a significant other, you may end up adding new drivers to your policy. As you can imagine, more drivers mean more risk. As a result, you can expect your premiums to go up as you add others to your insurance policy.

8. You’re No Longer Eligible for Certain Discounts

Insurance companies are known to offer several discounts, including those for:

  Good drivers

  Multiple policies

  Employer discounts

  Good student discounts

  And more

If you were previously eligible for one of these discounts but then your situation changes, you could see a corresponding change in rates to reflect your altered status.

9. The Insurance Company Implements Overall Increases

It’s a fact of life that prices tend to go up, and insurance companies may increase premiums across the board, seemingly on a whim. Whether it’s pressure to make profits for shareholders or a re-evaluation of the cost of doing business, you could see a spike in rates even though nothing about your situation has changed.

Tips for Getting the Best Car Insurance Rates

It can feel like you’re at the mercy of the insurance company when it comes to dealing with rate increases. The good news is that there are steps you can take to help mitigate rising costs. You can speak with your insurance agent about the following suggestions:

  Claim discounts for safety and anti-theft devices

  Claim discounts for bundling home insurance or other policies

  Raise your deductible (your out-of-pocket expenses for a claim will be higher, but you can end up paying a lot less each month)

  Reduce the number of miles you drive annually

Get the Lowest Possible Rates for Car Insurance Michigan Has to Offer

Insurance companies consider a complex array of factors when determining your exact rate. While many car insurance agents will work with you to uncover every possible discount you qualify for, it’s a good idea to work with a professional agent who can also help determine the ideal amount of coverage you need.

At Encore Insurance Group, our team has over ten years of experience helping Michigan drivers secure the best car insurance at affordable rates. Contact us today at (248) 466-0200 to explore your options for a tailor-made coverage solution.