Why? The price you pay for auto insurance depends on unique personal variables that can change from year to year. Some factors, such as the car you drive or how much coverage you purchase, are within your control. Others, like your age or the cost of repairing your car if it's damaged, aren't. So if you're wondering why your rates went up or down, consider these possibilities:
Changes In Your PolicyEven making a minor change to your policy can affect your premium. While raising your deductible may lower your premium, for instance, adding another vehicle or another coverage like towing and roadside assistance might cause it to rise. If you altered your payment plan, meanwhile, you may have gained or lost a discount in the process which will affect your premium.
Changes In Your Driving RecordStatistics show that an at-fault accident increases the odds that you'll have another within the next three years. Many companies adjust insurance prices to reflect the added risk during this period of time, but you'll typically pay far less in added premiums than it would cost to settle your claim without coverage.
Changes In Your LifeLife events can change the way insurance companies evaluate risk:
- Moving: It's more expensive to insure a car in crowded cities than in rural areas, but accident rates vary even by ZIP code – simply moving from one area of a city to another can affect the price of your insurance.
- Birthdays: Studies suggest that individuals are more likely to have an accident toward the beginning and the end of their driving careers, so getting a year older could be a factor in lower or higher insurance rates.
- Weddings: Data suggests that married people are less likely to cause accidents than single people, so tying the knot might lower your insurance bill.
Changes In Your CostsExternal factors beyond the control of consumers or insurance companies also influence the price of your coverage:
- Advanced technology: Expensive new features keep you safer, and lightweight aluminium bodies improve fuel economy, but both increase the cost of repairs after an accident.
- Strong economies: With high employment rates and low gas prices, people are driving much more and accident rates have risen – increasing the risk for even the best drivers.
- Inflation: The overall rate of inflation is low, but the cost of materials used to repair cars and medical care continues to go up over time.
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