If you're wondering why your car insurance costs a lot, it might be because your rates have gone up. While you can control some factors affecting your rates, there are also reasons beyond your control that can cause them to increase (the same applies to factors that can lower your rates).
As of February 2024, average car insurance costs have gone up a whopping 21% year over year according to the U.S. Bureau of Labor Statistics.
While inflation certainly plays a role, every aspect of the auto insurance business has become more expensive. As vehicles become more sophisticated and technology improves, individual components are more expensive and the cost to repair them increases. Additionally, an increase in natural disasters and severe storms are another critical area driving up insurance costs.
Here are some common reasons why your car insurance rates might go up:
1. Traffic Violations: Speeding tickets and other moving violations tell your insurance company that you're more likely to have an accident. The more speeding violations you have, the higher your risk, leading to a rate increase. Even minor violations could raise your rates.
2. Accidents: Whether you're at fault or not, accidents on your record indicate risk to insurance companies. At-fault accidents can increase rates, and in some cases, even not-at-fault accidents can cause a hike, depending on state laws and insurers' data.
3. Comprehensive Claims: Claims for incidents like theft, vandalism, hitting a deer or weather-related damage can lead to rate hikes, depending on your policy and the laws in your state.
4. Adding Vehicles or Drivers: Buying a more expensive car or adding high-risk drivers, like teens or those with poor records, can raise rates.