This is the most common question asked by many car drivers. Although you want to keep your car insurance premium very low, sometimes you end up paying more as you want to get failover protection when you meet with an accident. Car insurance is a major part of your monthly expenses and the more you understand, the easier it is to save. First, it is very essential to understand various factors which decide the increase in insurance rates.
Here are some reasons for you to ponder how your insurance rates may go up.
Insurance companies may change the rates
Every insurance company has their own reasons as to why they want to change the rates. Regardless of any external factors, insurance companies have the right to increase the rates to a certain minimum which the State Government allows.
Every State, rather even cities are taken into consideration while deciding your car insurance rates. Areas prone to theft, natural calamities such as hail storm, earthquakes etc will naturally keep you at risk. This will exponentially increase your premium rates. Hence, when you have a new zip code, make sure that you check out what faults are there in the location and anticipate your insurance rate change.
Insurance companies consider your credit while calculating your monthly premium amount. This will definitely put you at stake when your credit is bad. Hence make sure that you always maintain a good credit score and history.
New car generally has lesser premium because they would not have much maintenance, repairs or accidents. Whether or not you are at fault in the accident, when it occurs there will definitely be a change in the insurance rates automatically. However, you can consider not to see to much change in this cost if the accident is minor and there is not too much property or personal damage.
Generally when you have discounts over your car insurance policy, it will be for a certain period of time, mostly it is 1 year or a 2 term discount. After that period, the discounts lapse and you may have to go back to your original price without discount. This will change your insurance premium as well.
Suppose you have got a traffic ticket or violation or met with an accident, then insurance companies will surely increase your premium. Some companies may do this drastically while other insurance providers may consider the time you were with them and give you some concessions. Make sure you talk to them as soon as an accident occurs. Also, make sure you never admit that you are at fault since the price will increase immediately without giving you a chance to explain yourself.
During the first 2 months of joining a new policy, the rates may go up as you would not have submitted all your documents. If you delay in this process then it may further affect your premium costs. Some States may have installment fees or State specific additional costs. This will definitely affect your monthly premium when you order for a new service or relocate.