Auto Insurance Rates Going Up: Is it normal for auto insurance to go up every year?

It's normal for auto insurance to go up every year, usually due to factors outside your control. Changes to your driving record, credit score, or location can all increase car insurance rates. A drop in credit rating can cost you $57 a month with State Farm. If you don’t know why your auto insurance keeps going up, your best bet is to shop around online for free insurance quotes.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 16, 2021

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Things to remember...

  • Auto insurance rates can increase for several reasons and at different times throughout the year
  • However, when your auto insurance continues to go up year after year, you may be wondering why you keep experiencing these increases
  • There are several factors that can affect your auto insurance each year, and these factors continue to change over time
  • If you find that your auto insurance increases too much each year, you may want to look at getting quotes from other insurance providers
  • You can switch your auto insurance at any time, but it’s important to provide accurate information when applying through a new provider

Is it normal for auto insurance to go up every year? Everyone wants cheap auto insurance rates, and it’s frustrating when you see them rise.

Auto insurance rates are determined by many factors, which include your driving record, your claim history, and how much you use your car. Additionally, as more vehicles end up on the road, the potential to be involved in an accident goes up.

While seeing your auto insurance rates go up each year is not a welcome sight, it may be something you should anticipate. So, is it normal for car insurance rates to increase each year? What causes increases in rates? We’ll find out.

If your auto insurance keeps going up or your auto insurance doubled for no reason, enter your ZIP into our free comparison tool. Compare auto insurance quotes today to make sure you find the best rates available.

What are the factors that cause your auto insurance rates to increase?

Should your auto insurance go up each year? Sadly, the answer is that yes, you will generally see an increase each year.

Know the maximum allowable car insurance rate increase for a contract — although there is no maximum allowable increase, the state you live in does have a say in how big of an increase the company can require.

Most people think auto insurance only goes up if you have accidents or tickets. However, even if you haven’t filed a claim or gotten a traffic ticket, your car insurance rates can still increase.

There are a number of factors that can cause your insurance rates to increase, many of which are outside your control, even including the weather.

Some of these factors include:

  • Cost of operations
  • Driver demographics
  • Type of vehicle
  • Number of drivers on the road
  • Where you garage your vehicle
  • Distracted drivers
  • Rising repair and medical costs
  • Higher speed limits
  • Insurance fraud
  • Uninsured drivers

Let’s look at how some of these factors can affect your auto insurance rates.

How do operating costs affect your auto insurance?

Why are my Allstate rates increasing? Why did my auto insurance go up with Progressive, State Farm, or another large company?

One of the largest factors is the cost of operating an insurance company, which continues to increase as more insurance policies are issued, more claims are filed, and more employees are needed to manage the workload.

The insurance providers have to charge enough in rates to manage their business while paying out all valid claims.

Do auto insurance rates increase with age?

Demographics are also something out of your control.  Some companies charge you more based on your age and gender, although some states like California have outlawed that practice.

How much will my insurance go up as I age?

Let’s look at just how much your age and gender will affect your auto insurance rates.

Average Annual Auto Insurance Rates by Age and Gender
CompaniesMarried 60-Year-Old Female RatesMarried 60-Year-Old Male RatesMarried 35-Year-Old Female RatesMarried 35-Year-Old Male RatesSingle 25-Year-Old Female RatesSingle 25-Year-Old Male RatesSingle 17-Year-Old Female RatesSingle 17-Year-Old Male Rates
USAA$1,449.85$1,448.98$1,551.43$1,540.32$1,988.52$2,126.14$4,807.54$5,385.61
GEICO$2,247.06$2,283.45$2,302.89$2,312.38$2,378.89$2,262.87$5,653.55$6,278.96
State Farm$1,873.89$1,873.89$2,081.72$2,081.72$2,335.96$2,554.56$5,953.88$7,324.34
American Family$1,992.92$2,014.38$2,202.70$2,224.31$2,288.65$2,694.72$5,996.50$8,130.50
Nationwide$2,130.26$2,214.62$2,360.49$2,387.43$2,686.48$2,889.04$5,756.37$7,175.31
Progressive$1,991.49$2,048.63$2,296.90$2,175.27$2,697.73$2,758.66$8,689.95$9,625.49
Farmers$2,336.80$2,448.39$2,556.98$2,557.75$2,946.80$3,041.44$8,521.97$9,144.04
Travelers$2,051.98$2,074.41$2,178.66$2,199.51$2,325.25$2,491.21$9,307.32$12,850.91
Allstate$2,913.37$2,990.64$3,156.09$3,123.01$3,424.87$3,570.93$9,282.19$10,642.53
Liberty Mutual$3,445.00$3,680.53$3,802.77$3,856.84$3,959.67$4,503.13$11,621.01$13,718.69
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Young males pay the most, while older females pay less.

One thing that you can control is the vehicle that you drive. The age and type of vehicle you drive can play a role in your auto insurance rates. Generally, newer cars will cost more to insure.

Why does auto insurance go up with a new car?

Parts for a new car can be more expensive and the replacement cost of a totaled new car is much higher than an older car. The upside is that with most new cars, you can get an insurance discount based on your car’s safety features.

Another factor that you cannot control is the number of drivers on the road. While more drivers mean more policies and more business for insurance providers, they also mean more opportunities for an accident or claim situation.

These drivers may not be experienced or may not be operating a safe vehicle, or in some instances, they may not have valid insurance.

According to the Insurance Information Institute, about 13 percent of motorists are uninsured. If your state has a large number of uninsured drivers, your auto insurance rates can increase.

All of these factors can lead to an increase in your auto insurance rates.

Why did your auto insurance go up when you moved?

Even factors like where you live and where you garage your vehicle can influence your rates. If you live in an area or store your vehicle in an area prone to vandalism or theft, your rates may increase to offset any potential losses.

Even living in an area that is prone to extreme weather like hurricanes, floods, or tornados can increase your rates.

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What can you do to lower your auto insurance rates?

It’s important to manage what factors you can to keep your auto insurance rates in check. While some of what makes auto insurance rates rise are out of your control, such as the number of drivers on the road or your age, there are some things you can do to help lower your rates.

Perhaps the best way to lower your car insurance rates is to add discounts to your policy. You can save a huge chunk of money if you can add common discounts, such as multi-car, multi-policy, safe driver, or good student discounts.

Most companies will also let you bundle your discounts for even great savings. Speak with your agent to find all of the ways you can save money on your auto insurance.

Will an improved driving record affect your auto insurance?

One of the simplest ways to control your insurance rates is to manage your driving habits. If you drive safely and avoid accidents, you can positively influence your driving record; this can affect your rates on a long-term basis.

Let’s look at how much just one accident or speeding ticket can damage your auto insurance rates.

Average Annual Auto Insurance Rates by Driving Record
CompaniesAverage Annual Rates with a Clean RecordAverage Annual Rates with 1 AccidentAverage Annual Rates with 1 DUIAverage Annual Rates with 1 Speeding Violation
USAA$1,933.68$2,516.24$3,506.03$2,193.25
GEICO$2,145.96$3,192.77$4,875.87$2,645.43
American Family$2,693.61$3,722.75$4,330.24$3,025.74
Nationwide$2,746.18$3,396.95$4,543.20$3,113.68
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
Progressive$3,393.09$4,777.04$3,969.65$4,002.28
Travelers$3,447.69$4,289.74$5,741.40$4,260.80
Farmers$3,460.60$4,518.73$4,718.75$4,079.01
Allstate$3,819.90$4,987.68$6,260.73$4,483.51
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
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Bad driving habits can cost you hundreds of dollars in auto insurance increases, not to mention any fines you may be facing.

If someone hits my car, does my insurance go up? Thankfully, your auto insurance will not increase if someone hits your car and you are not at fault in the accident.

Will better credit affect your auto insurance rates?

It may surprise you to learn that increasing your credit score can also improve your car insurance rates. Many companies will charge you more if you have a low credit score since they believe a low score will equal more claims.

This table shows you how much your credit score will affect your rates.

Average Annual Auto Insurance Rates Based on Credit Rating
CompaniesAverage Annual Rates with Good Credit RatingAverage Annual Rates with Fair Credit RatingAverage Annual Rates with Poor Credit Rating
USAA$1,821.20$2,219.83$3,690.73
State Farm$2,174.26$2,853.00$4,951.20
GEICO$2,434.82$2,986.79$4,259.50
American Family$2,691.74$3,169.53$4,467.98
Nationwide$2,925.94$3,254.83$4,083.29
Progressive$3,628.85$3,956.31$4,737.64
Farmers$3,677.12$3,899.41$4,864.14
Allstate$3,859.66$4,581.16$6,490.65
Travelers$4,058.97$4,344.10$5,160.22
Liberty Mutual$4,388.18$5,604.24$8,802.22
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According to Experian, the average U.S. credit score is 703, which falls in the good category. If your credit score is below that, improving your score will help your auto insurance rates as well as any other loans or purchases you make.

Increasing your credit score will help you in a variety of areas, not just with auto insurance.

How do your deductible and coverage affect your auto insurance rates?

You may also want to consider carrying a higher deductible on your policy, which can lower your rates. The deductible is an amount of any claim you’re obligated to cover, which is normally deducted from any claim settlement you’re offered.

If you’re able to afford it, a higher deductible means you’ll be handling that much of any claimed loss, thereby reducing the costs of your auto insurance policy.

You can also change the coverage you carry. Although less coverage equals less protection, it also equals lower rates. Re-evaluate your needs to see if you can drop or lower coverages that are beyond your state minimum requirements.

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Why does your auto insurance keep going up every six months?

Every time your policy is up for renewal, the rate can be adjusted, which explains why auto insurance goes up every six months. If you get a great deal on your auto insurance, consider signing a one-year policy to keep your rate as low as possible for as long as possible.

Are you interested in the reasons for auto insurance premium changes in the middle of a contract? Adding coverage, purchasing a new car, or adding a teen driver can all be a cause.

What’s the best way to choose your auto insurance provider?

Your auto insurance rates can be influenced by a variety of factors, some of which are outside your control.

The increasing number of cars on the road introduces more risk to every driver, which means that auto insurance rates increase to offset the potential claims.

Many insurance providers have needed to increase their rates to offset increasing claim settlement costs; while claims are declining, the payouts on those claims are increasing.

Additionally, the rates being collected by these providers may not be enough to completely cover the settlements being paid out, which means funds need to be gathered from other areas.

So just how much have auto insurance rates increased in the last year? Well, that depends on all of those factors we talked about and more.

Make sure you are asking for discounts and getting quotes to find the cheapest car insurance that fits your needs.

The best way to manage your rates is to shop around for cheap auto insurance coverage, since some providers may offer coverage at lower rates compared to other providers.

While switching your coverage too often may be detrimental, comparing quotes at least annually can allow you to compare pricing and coverage options.

You can shop around and get quotes from multiple insurance providers, which can give you an idea of what rates to expect. It’s easy to find affordable auto insurance near you if your rates have gone up.

Now that you know the answer to, “Is it normal for auto insurance to go up every year?” you can get car insurance quotes at any time by entering your ZIP into our free rate comparison tool below.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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