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Every driver wonders when car insurance rates can go up at some point. Whether it’s a parking ticket, a speeding ticket, or a car accident, a natural reaction is to wonder how your car insurance rates will be affected. Some drivers are even just curious to know when they can expect an increase even with a good driving record since insurance companies are well known for increasing their rates randomly.
How Much Is Car Insurance Per Month?
Car insurance rates can go up for a number of different reasons and some of these you have little control over. The good news is that the cost of insurance is a fixed cost during your policy period. The bad news is most car insurance companies only offer 6-month policies, so your car insurance rates are open for change twice a year!
Reasons for Car Insurance Rates Increasing Include:
Anytime you are convicted of a moving violation; there is a chance your car insurance rates will increase in the future. However, this depends on the violation and your particular insurance company. Some companies rarely increase rates for a single ticket.
Companies adjust your rate
Some other companies quickly adjust your rates the very first chance they can. There is no handbook to say when your auto insurance rates will increase after a typical moving violation. However, don’t worry if you see an increase in your premiums one day.
More serious traffic violations like excessive speeding, diving with negligence, or causing an accident with no insurance are much more likely to increase your insurance rates faster than a minor speeding ticket. High-risk moving violations are often quickly picked up during a policy renewal period by many car insurance companies.
Change in Laws
State and Federal laws play a very important role in the cost of car insurance. Some states have laws that allow insurance companies to provide affordable rates. States like Louisiana and Michigan have rules which expose insurance companies to much higher risk.
Anytime state laws have a negative influence on an insurance company’s ability to profit, you can bet higher premiums are on the horizon. Sadly, however, when laws pass which increase the profitability of the insurance industry, it’s rare to see lower premiums.
How much can you save by switching companies?
Filing a Claim
This is a hot topic as the entire risk formula insurance companies use based on the risk of a policyholder filing a future claim. However, no insurance companies release the details of how filing a claim affects rates. Some drivers report no increase will others do.
Much of it also depends on the type of claim and how much the claim is for. When shopping for new auto insurance, many companies look at your prior claims history. Those with prior claims may end up getting higher quotes than drivers who have a history free of claims.
Lapse in Coverage
Having a car insurance policy lapse in coverage is never good. Insurance companies consider drivers who have a lapse in coverage higher risk than drivers who are simply switching existing insurance coverage from one provider to another. Long lapses can even revert your risk level to that of a teenage driver.
Any policy canceled for non-payment can bite you when looking for a new car insurance policy. Car insurance companies expect you to pay on time. If you have a record of non-payment, you almost always will get higher quotes.
A DUI or DWI Conviction
No one likes a drunk driver and maybe nobody more than most insurance companies. Anyone convicted of a DUI or DWI will automatically get higher car insurance rates. And even have coverage dropped at renewal time from many insurance companies. There is no greater red flag to the amount of risk you pose as a driver than a DUI or DWI conviction.
Where you live plays a role in the cost of your auto insurance. Moving to a new state or even simply a new zip code, this can cause car insurance rates to change. Some moves may end up saving you money on insurance while others can cost you more than you may expect.
Can I Do Anything to Lower My Car Insurance Rates After an Increase?
Every company is different when it comes to increasing rates. While some variables are beyond your control, there are things you can do to maintain or lower your rates after an increase in premiums. Some drivers opt for attending an approved driving school. Other drivers re-evaluate their policy coverage and deductibles hoping to modify coverage. You should also brush up on the insurance discounts available and make sure any discounts you are eligible for are applied to the policy.
Talk to Your Insurance Company
If car insurance rates have increased purely due to your higher risk as a driver, always speaks with your insurance company about options. The company have additional discounts and then shop around and compare auto insurance quotes from several providers to see if there is a better deal available. No matter what risk you pose as a driver, it’s still possible to find affordable car insurance regardless of where you live.