Is it normal for auto insurance to go up every year?

Auto insurance rates are affected by many variables and change often. Keep your rates low by (1) driving safe, (2) maintaining good credit, and (3) comparison shopping.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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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...

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Reviewed byDaniel Walker
Licensed Insurance Agent

UPDATED: Apr 23, 2020

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Things to remember...

  • Car insurance rates can increase for several reasons and at different times throughout the year
  • However, when your car 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 car insurance each year, and these factors continue to change over time
  • If you find that your car insurance rates are increasing too much each year, you may want to look at getting quotes from other insurance providers
  • You can switch your car insurance at any time, but it’s important to provide accurate information when applying through a new provider

Car 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 premium increase each year is not a welcome sight, it may be something you should anticipate.

Compare car insurance quotes today to make sure you find the best rate available. Enter your zip code into our free comparison tool to get started.

What can cause your insurance rates to increase?

There are a number of factors that can cause your insurance rates to increase, many of which are outside your control. These factors include:

  • Cost of operations
  • Number of drivers on the road
  • Where you garage your vehicle

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 premiums to manage their business while paying out all valid claims.

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, it also means 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. All of these factors can lead to an increase in your premium rates.

Even factors like where you live and where you garage your vehicle can influence your premiums as well. 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.

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What can you do to lower your insurance rates?

It’s important to manage what factors you can manage to keep your insurance premiums in check. While some factors are outside 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.

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 premiums on a long-term basis.

Another way to help manage your rates is to shop around for 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 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 to your insurance provider.

Choosing Your Insurance Provider

Your car insurance premiums can be influenced by a variety of factors, some of which are outside your control. The increasing number of cars on the road introduce more risk to every driver, which means that car insurance premiums increase to offset the potential claims.

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

Additionally, the premiums 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.

You can shop around and get quotes from multiple insurance providers, which can give you an idea of what premium rates to expect. You can get quotes at any time, just enter your zip code into our free rate comparison tool below.

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