10 Reasons Your Car Insurance Costs Are Through The Roof

by Ron Haynes


Are you like me? No claims of any kind (ever), no traffic tickets, no accidents, and no out-of-control teenagers on my policy (so far), yet my car insurance took a good-sized jump in premium costs. I asked my auto insurance agent what happened and he gave me these reasons why anyone’s auto insurance rates increase:

1. Your driving record. Nothing has a bigger effect on your auto insurance premiums than your driving record. Keep your record clean and enjoy lower premiums. But … my driving record is clean.

2. Your credit report. Most auto insurance companies review your credit report to assess your likelihood of filing a claim. In their experience, people with a poor credit score are more likely to file a claim. But … my credit score is over 800.

3. How far you drive annually. Ever seen this question on an application for car insurance and thought, “Why do they want to know THAT?” It all has to do with the number of miles you drive on a regular basis. Each mile you drive puts you at risk for an auto insurance claim. Ok … I do drive quite a lot with my job.

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4. How much coverage you want. If you only need the state law minimum amount, your auto insurance rate will be less. But if you’re like me and make the choice for much higher liability coverage on your car insurance, your premium will increase. Yes, I have a large coverage amount, but it hasn’t changed since my last renewal.

5. Your car. A candy apple red Corvette with $40,000 in customized options will obviously cost more to replace than a 10 year old Jeep Cherokee that needs a paint job. Additionally, that super car will probably be driven a little faster and the car insurance companies know it. How about a 2010 Toyota Corolla? Not exactly a speedster.

6. Your zip code. Postal zip codes have certain accident rates, DUI rates, theft rates, and claims rates. The more claims of any type within your zip code, city, or state, the higher your auto insurance premiums will be. I have no idea if my zip code was the culprit.

7. Your claims history. If you have a history of filing car insurance claims, no matter who’s fault, you’re a bigger risk to insurance companies. Uh, no claims whatsoever.

8. Your driving experience. The less driving experience you have, the higher your auto insurance premiums. This is why the insurance application asks how old you were when you were first licensed to drive a car. How about well over 30 years driving experience?

9. Are you currently insured? If you’ve lapsed multiple car insurance policies in the past, insurance companies view you as a higher risk. Not a factor here.

10. Do you have a low deductible? Low deductibles on the back end mean higher premiums on the front end. A better choice is to raise your deductible and save the difference in your auto insurance premiums as part of your emergency fund. Nope, I have a $1,500 deductible.

So why did MY car insurance rates increase? The answer wasn’t easily determined but it’s basically because my state’s rates were increased across the board. Sounds like it may be time to go back to InsureMe.com and make sure I’m getting the best deal.

If you want to make sure YOU are getting the best deal, head on over to InsureMe.com. There, you can shop around for any type of insurance without the hassles of dealing with an agent until you’re good and ready.

Let InsureMe.com do all the work. You just sit back and SAVE!

About the author

Ron Haynes has written 1001 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 4 comments }

Student Car Insurance

I would also add that eligibility for discounts can change over time (not to mention that different insurance companies have different discounts and criteria for getting discounts) so it can definitely pay off to set some time aside every 6 months or so to step back and re-evaluate options.

For example, most have heard of the “good student” discount from different auto insurance companies where if a student on the policy has good grades then they can get a discount on their car insurance rates. It is easy to forget about this discount if the student did not have stellar grades in the past.

If the student now has good grades then now is a great time to start seeing if one can take advantage of the discount that they couldn’t get in the past.

Florida Car Insurance

A lot depends on where you live also. Here in Florida our car insurance rates can vary a lot depending upon how close one lives to a big city or heavy traffic.

Ron

Yep. Covered that one in number 6 — your zip code.

Charlotte@TheCCI

Ron – great article. Wanted to let you know that Floridians should be seeing a significant rate cut in 2013. I receive emails from the Florida CFO, Jeff Atwater. In one of his recent messages he said, “The independent analysis, released this week, projects that Florida drivers will see a 14 to 24.6 percent decrease as a result of of the reforms passed last session, which go into effect Jan. 1, 2013.” His office has been targeting fraud and points to that as the reason for the savings. As a single mom with a teenage driver, and another on who will be ready to drive very soon – I am grateful for any savings to be found!

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