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Compare Quotes Every 6
Every car insurance company calculates premiums slightly differently, so the quote you get from one company can easily be hundreds of dollars more expensive than another companys quote. Getting quotes from multiple insurers every time you need to renew your policy can help you realize if youre overpaying for the same amount of coverage.
Why Is Your Car Insurance So High
Modified date: Jan. 30, 2021
It seems like car insurance rates just keep getting higher and higher.
And for good reason they are.
But youre likely wondering why is my car insurance so high?
There are several reasons your car insurance is higher than youd like including having a poor driving record, a history of claims, and a poor credit history. Also, if you drive a lot, youre driving a car thats considered unsafe, or you have children on your policy, you might see increased rates.
In this article, Ill show you what determines your auto insurance rate, why your rate is so high, and what you can do to reduce it.
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Why Is My Car Insurance So Expensive
You answered all the questions and provided every last detail. Then that sinking feeling hits you.
Thats when you realize how much youre going to be spending on car insurance.
Getting an auto quote that is more than you were hoping to pay is a downer.;
If youve been on a parents car insurance and recently switched to buying your own coverage, you could be surprised to find out how much insurance costs.;
Your Insurance Has Lapsed
Letting your car insurance run out or lapse is a serious matter, and this can, of course, affect your premium. When youve had a car for a few years, youll likely receive copious annual reminders to ensure this doesnt happen which shouldnt be ignored. If you are in the process of buying a car when the insurance lapses, youll still have to face the repercussions regarding your insurance cost.
Solution: Although there is no retroactive solution to this, not allowing your car insurance to lapse is the best way to avoid a boost in premium. Its especially easy to let insurance lapse whilst a car is in between drivers, or perhaps waiting for a new driver to pass their test. In these times, getting temporary car insurance means you dont need to rush into an annual policy, but you have cover to bridge the gap.
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You Have An Insurance Gap
Insurance companies prefer drivers with long, uninterrupted insurance coverage. If you havent had insurance before or stopped your coverage this can make your policy more expensive.
This is why you should stay insured when possible. If you let your insurance lapse even for a short time such as when you switch car insurance companies or leave your parents coverage, this could also increase your rate.
This is also the reason why people who have recently moved to the U.S. can see higher rates. With no insurance history, your rate will be higher.
Why Does Auto Insurance Cost So Much
;Important:;As of June 20, 2021, insurers cannot use your credit scores to determine how much you pay for auto and homeowners insurance. If your company is charging you more, shop around. Companies have used credit scoring for two decades, so now is the best time to find a better deal.
Auto insurance companies look at a variety of factors when setting auto rates to determine your premium.
An auto premium is the amount an insurance company charges you in return for auto coverage. To determine how much your company will charge you , it looks at rating factors.
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Speeding Tickets And Other Moving Violations
Violations on your motor vehicle report, especially a DUI or multiple speeding tickets, tell your insurance company that you’re more likely to have an accident than a driver with no violations. The more violations you have, the higher your risk to file a claim resulting in auto rate increases. Even a minor moving violation could increase the cost of your auto policy. Keep in mind that insurance companies won’t increase your rate due to a non-moving violation like a parking ticket.
How Your Driving Record Can Increase Your Rates
Even if you have no accidents on your record, you could pay high insurance premiums. In fact, you might pay higher rates for car insurance than a driver with an at-fault accident due to factors like credit score, speeding tickets, and more.
Here are some of the ways a driving record can increase your rates even if you have no accidents:
Speeding Tickets: Some insurance companies ignore a single speeding ticket, especially if its a minor offense. However, drivers with multiple speeding tickets or a single serious speeding violation could face higher insurance premiums. Statistically, speeding increases the chances of an accident, and insurance companies raise rates to cover this added risk.
Reckless Driving: Reckless driving is a serious offense. Some insurance companies treat reckless driving convictions as seriously as DUIs, although it varies depending on your state and insurance company.
Other Tickets or Citations: Parking tickets and other non-moving violations are unlikely to affect insurance premiums. However, other tickets or citations could raise the cost of car insurance. Any moving violation could raise premiums, depending on your insurer and state.
Changes to Credit Score: Insurers use credit score to calculate insurance rates in every state, although three states have banned the practice. If you have a low credit score, or if your credit score suddenly dropped , then your car insurance premiums could rise significantly.
Get Covered By Your Parents Insurance
Another option for saving money is to get on your parents insurance policy. Its important to note that you can only do this if youre living at home or are attending school.
Getting added to your parents policy can save a driver in their teens or early twenties thousands of dollars per year.
This is because you benefit from your parents age, experience, driving record, and credit score. This is one of Dave Ramseys favorite methodsto lower the cost of insurance for teens.
How To Pay Less For Car Insurance
In addition to doing what you can to tip the above-listed factors in your favor, there are a few steps you can take to cut your car insurance rates.
1. Always shop around for auto insurance. Whenever your policy comes up for renewal, get quotes from other insurers before you sign on with your current provider. Dont just assume that because your insurer was the cheapest option last year, they still will be this yearmany factors may have changed in the past six or 12 months.
Insurify;can help you with;car insurance quotes comparison;from top-rated regional and national insurance companies. No matter your insurance history or point in your policy period, you can compare quotes, unlock discounts, and save up to hundreds of dollars per year on your car insurance premium.
Real-time quotes comparison with Insurify will give you the peace of mind that youre getting the best coverage out there for youyour driving history, your risk profile, your insurance needs.
2. Look into;car insurance discounts aggressively, both with your current insurer and other insurance companies. While certain discounts tend to be universalfor example, multi-policy discounts for having more than one type of insurance policy with a companyothers are relatively unique. Ask your insurance agent or call your insurers customer service department and find out which discounts they offer.;Individual discounts tend to be reasonably small, but if you can grab five or six of them, the savings can add up.
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How To Lower Your Car Insurance Premium
If youve read this far, you now know exactly how your rates are determined and why your current rate might be higher than youd like.
You can reverse many of these factors by doing the opposite of whats causing the rate to be high. But for good measure, here are a few more tips to cut your premium:
Get And Compare Quotes
One of the best ways to save money on car insurance is to shop around and compare quotes from a number of insurance companies.
QuoteWizard.com LLC has made every effort to ensure that the information on this site is correct, but we cannot guarantee that it is free of inaccuracies, errors, or omissions.All content and services provided on or through this site are provided “as is” and “as available” for use.QuoteWizard.com LLC makes no representations or warranties of any kind, express or implied, as to the operation of this site or to the information, content, materials, or products included on this site.You expressly agree that your use of this site is at your sole risk.
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How Often And How Far You Drive
People who use their car for business and long-distance commuting normally pay more than those who drive less. The more miles you drive in a year, the higher the chances of a collision regardless of how safe a driver you are.
- To help offset how much you drive, consider joining a car or van pool, riding your bike or taking public transportation to work. Insurance rates may be lower with a shorter commute to work, so reducing your total annual driving mileage may lower your premiums.
- Check with your insurance company about a discount for driving less. Usage based car insurance like Drive Safe and Save by State Farm® might save you money when you drive less by using your cars telematics information.
What Causes High Insurance Rates
You’ll find that car insurance rates are high for a number of factors. Insurance companies calculate the rate they will charge you based on:
- Where you live
It may seem unfair that your age plays such an important factor in determining your insurance premium, but there is a good reason for using this. Younger drivers, especially men, are riskier drivers, which is why they will ultimately pay more for their insurance, according to Cover. Of course, this is only until the age of 25, and once you hit 30, the rates will even out.
Marital status is another factor that may seem like it shouldn’t be taken into consideration when calculating your insurance rate. However, insurance companies view as more stable and less likely to be involved in an accident says insurify. In fact, unmarried drivers are at a much higher risk of being involved in a serious accident than their married counterparts.
To help keep your premium low, don’t let your coverage lapse. This means you need to keep paying your insurance every month. If you get dropped by your insurance company for not paying, it will cost you when you need to get insurance again. Even if you decide you don’t need insurance because you aren’t driving or a short amount of time goes by while you switch insurance providers, you’re going to end up paying more when you do reinstate a policy.
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How Much Does Car Insurance Cost
Car insurance costs are different for every driver, depending on the state they live in, their choice of insurance company and the type of coverage they have. But when trying to save money on car insurance, it helps to know what the typical driver pays.
On average, the typical person spent $1,190 on car insurance in 2018, based on the latest figures available from the National Association of Insurance Commissioners . According to the NAIC data, car insurance premiums rose 30% between 2014 and 2018, despite the number of insured vehicles only rising by 7%.
Data from AAA put the average cost of car insurance for new vehicles in 2020 slightly higher, at $1,202 annually. The numbers are fairly close together, suggesting that as you budget for a new car purchase you may need to include $100 or so per month for auto insurance.
Why Is The Cost Of Car Insurance So High
There are several reasons why the cost of car insurance is so high, including:
A rise in Insurance Premium Tax;In 2017, Insurance Premium Tax, a tax which applies to a wide variety of insurance products, rose to 12%. Meanwhile, a higher rate of 20% is applicable to some vehicles that are bought as new from a dealership. As various other factors are causing the cost of car insurance to rise, an increase in Insurance Premium Tax only amplifies these costs.;;A cut to the Ogden discount rate;The Ogden discount rate, which applies to compensation pay-outs for life-changing accidents, has fallen from 2.5% to -0.25% in recent years. This has meant larger lump-sum pay-outs and, therefore, higher premiums.;;Claims have become more expensive;Todays advanced vehicle technology has led to an increase in keyless car crime and more expensive repair bills. This, in turn, has led to increased rates of theft and repair claims. For example, the Office for National Statistics found that the cost of damage in incidents of theft of and from vehicles rose from an average of £284 in 2010/11, to £406 in 2017/18.
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Type Of Vehicle You Drive
The type of vehicle you drive can also affect your car insurance rate. This includes both the make and model of the vehicle. You’ll pay different rates for driving a Ford, Honda, Toyota, or other makes. Obviously, the more expensive the car, the more you will pay to insure it, but for some, it’s worth the price. High-end sports cars, such as an Alfa Romeo, will cost a pretty penny to insure, while a nice safe minivan or small SUV will be much cheaper.
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Reasons Why Your Car Insurance Is So High
A multitude of factors influence your car insurance rate, according to insurance and personal finance expert Laura Adams.
If your car insurance premium is higher than you like, consider the various factors that affect your rate, Adams advised.
Not only does the type of car you drive play a role, but so does your coverage amounts, deductibles, driving record, claims history, annual mileage, credit, age, gender, marital status, and address. In other words, theres a lot that goes into your rate, so its not easy to pinpoint one reason why your premium is high.
If youre wondering why your car insurance is so expensive, consider both factors within and outside of your control. While you can drive carefully, you cant immediately remove accidents from your driving record. Personal factors such as your age and gender will influence your rate no matter what. But you may be able to reduce your mileage, improve your credit score or change your deductible amount to get a lower rate.;
Take Advantage Of Discounts
Even though discount availability varies by state and insurance company, auto insurance discounts are the quickest way to automatically lower your premium regardless of your age, location, and driving history. When you are getting a quote, be sure to inquire what discounts may apply to your new or existing policy. There are many types of car insurance discounts including:
- Multi-policy discounts
- Anti-theft and safety restraint discounts
- Hybrid car discounts
- Full pay or auto-pay discounts
- Defensive driving discounts
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Shop Around For Better Car Insurance Rates
If your policy is about to renew;and the annual premium has gone up markedly, consider shopping around and obtaining quotes from competing companies. Also, every year or two it probably makes sense to obtain quotes from other companies, just in case there is a lower rate out there.
Remember,;cheap doesnt always mean good, and going with the lower-priced company isnt always the wisest decision. Thats because the insurers should also be considered. After all, what good is a policy if the company doesnt have the wherewithal to pay an insurance claim?
To run a check on a particular insurer, consider checking out a site that rates the financial strength of insurance companies. The financial strength of your insurance company is important, but what your contract covers is also important, so make sure you understand it. Insure.coms site bases its insurance company ratings on data assembled by Standard and Poors.
In general, the fewer miles you drive your car per year, the lower your insurance rate is likely to be, so always ask about a companys mileage thresholds.