Why Did My Car Insurance Go Up? 7 Reasons Insurance Rates Increase

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Written by
Jeff Bray
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Each year, vehicle owners ask the same question: why did my car insurance go up? Insurance costs will inevitably rise. Your insurance rate is rarely maintained or lowered. But what causes this constant stair-stepping that insurance companies give their customers?

In my nine years of experience, I have seen many insurance shoppers jump from one company to the next, trying to find a company that provides the best rate. Inevitably, even that company will increase their rates. Let’s talk about why this happens to policyholders like you.

Key Takeaways

  • Car insurance goes up based on claim history, policy changes, and residence changes the driver makes during the policy period

  • A driver can find cheaper car insurance by comparing rates, reducing their credit score, and looking for discounts they may be eligible for

  • A driver can save on their policy through discounts such as being a student, paperless billing, and bundling home or other line of insurance

Why Did My Car Insurance Go Up?

Many factors cause car insurance to go up:

  1. Where you live
  2. Drivers on your policy
  3. Vehicles on your policy
  4. Type of vehicle you drive
  5. Accessories on your vehicle
  6. Claims History
  7. Credit Score

7 Factors You Can Control

Let’s talk about what you, as a driver, have some control over.

1. Where you live

One of the first questions insurance companies ask other than age and gender is your zip code. It’s important to give a correct address because rates are determined by where you live. Even a few blocks over can make a big difference in your rates.

City, State Zip Code Annual Premium
Detroit, Michigan 48204 $4,726
New York, NY 11212 $4,545
New Orleans, LA 70117 $4.087
Miami, FL 33142 $3,938
Philadelphia, PA 19139 $3,315

2. Drivers on your policy

You, your spouse, licensed children, or anyone who has regular access to your vehicle. These must be included on your insurance policy. If your insurance company discovers someone is driving your vehicle, they can automatically add them to your policy.

3. Vehicles on your policy

All vehicles must carry auto insurance. It is mandatory in 48 of the 50 states. Adding a car to your policy increases your rate, especially one that holds a lien or another type of financial responsibility.

Below are the top five states theft rate for 2022 compared to their rate in 2021.

State 2021 2022
California 201,034 202,685
Texas 95,082 105,015
Washington 35,921 49,939
Florida 43,250 45,973
Colorado 38,570 42,237

4. Type of vehicle you drive

If a vehicle is a high target for thieves, it increases the insurance rate no matter which insurance company you choose. For 2023, three of the topmost stolen vehicles belonged to Dodge.

  • Dodge Charger Hellcat – for every 1000 vehicles stolen, 25 of them are Hellcats.
  • Dodge Charger HEMI – HEMIs are 20x more likely to be stolen than an average automobile.
  • Infinity Q50 – a popular model since 2014.
  • Dodge Challenger – ranks fourth, but still a common brand amongst thieves.

5. Accessories on your vehicle

When a driver adds vehicle accessories, these additions may require additional coverage, thus increasing insurance costs. However, you can also receive discounts with certain safety features like airbags and blind spot detection.

6. Claims History

This is a big one. Even a minor speeding ticket will get back to your insurance company and you can see your car insurance go up when you renew. An accident, even if it wasn’t your fault, will increase your rates, sometimes significantly.

Also, don’t think you can exclude a driver with a bad record to lower your rates. For example, you have a licensed adult child living in your home. In some states, you must include the driver on your policy unless they can prove they have auto insurance of their own.

7. Credit Score

Did you know your insurance company peeks at your credit score? When you obtain a quote, they can use it when quoting your monthly rate. To assist with your premium, know your score and do what you can to keep it up.


  • Insurance Lapse: Your past insurance history can have an impact on future payments. If you have a lapse or canceled policy, you’re now a risk. Insurance companies can increase your rates due to your payment history.
  • How Much You Drive: How much time you spend on the road puts you at greater risk for an accident. This is why it’s important to provide an accurate yearly mileage estimate.
  • Insurance Fraud: If you have ever had a canceled policy or been convicted of insurance fraud, you will have a hard time finding insurance, or when you do, you will have a rated policy.

Changes in Your Driving Profile Can Increase Rates

A driving profile is essential to telling the insurance company who is behind the wheel and the type of risk they pose. Changes to this profile will affect the cost. Age, for instance. The younger you are, the more risk. The older, the less, and rates can lower about the age of 25.


When you obtain your license and get behind the wheel, you must either be placed on a parent’s policy or purchase auto insurance on your own. Insurance for a teen will be more expensive than an adult due to inexperience.

Driving record, speeding tickets, and other moving violations

If you have a ticket for speeding or other unsafe driving behavior, your insurance will go up. Switching companies and excluding your past won’t work. Violations go on your permanent record, and all insurance companies have access to that information. Failure to disclose this, you run the risk of denial, being forced to pay back payments, or the cancelation of your policy.

Accidents (both at-fault and not-at-fault)

Just as moving violations, accidents stay on your record. How long depends on the state you live in and the type of violation incurred. Typically, the duration is three to five years. In some states, it can be less. If it is your first infraction, some companies offer Accident Forgiveness.

Type of accident Length of time on record
First minor accident 3 years (unless you have accident forgiveness)
Minor accident 3 years
Major accident 5 years
DUI 10 years
Hit-and-run 10 years

If you are found not-at-fault in an accident, it doesn’t necessarily mean your rates will not increase. Occurrences depend on the insurance company and your claims history.

Changes to your insurance score

Most states employ a points system to keep drivers accountable. When you receive a moving violation or have an accident, you lose points on your license. Too many points and you can:

  • Have your license placed on probation or suspended.
  • Designated as “high-risk” for auto insurance.
  • Pay higher rates for your car insurance.
  • No leniency if you go to traffic court.

Factors You Can’t Control

Sometimes, there are premium increase factors that are beyond your control. These are often called environmental. Other factors can be customer-initiated and occur due to life situations. Let’s take a look at some of these instances.

Crime and claims in your zip code

If there is a spike in crime within a zip code or a rise in claims on a particular vehicle’s make and model, this can affect how much you pay for auto insurance. Recently, there was a rise in Kia and Hyundai automobile thefts when viral videos showed how to steal these cars easily. Insurance companies started not to insure these cars unless they upgraded their anti-theft systems.

Distracted and uninsured drivers on the road

You are in control of your space and vehicle. You can’t control what others do with their own property. It’s essential to always be aware of your surroundings on the road. With the rise of technology, there are more accidents on the road. In 2021, there were 3522 distracted-related fatalities in the US. This includes mobile phone use and texting. Many drivers feel comfortable using devices due to the rise in car-based technology, such as brake sensors that stop the car before an accident.

Loss of discounts

Many insurance companies give drivers discounts, such as ‘safe driver,’ when they go for a certain time period without filing a claim. If you have an accident or receive a ticket, you can lose this discount. There are also other discounts drivers receive but forget until you separate it.

  • Multi lines: If you have a renters or homeowners policy bundle or multi-car policy.
  • Multi-vehicle: Having multiple vehicles can help bring discounts. Removing a car through selling or a divorce will increase your rate.
  • Student: If you or a child on your policy graduate and lose their student status.
  • Paperless: If you choose to have your bill mailed to you instead of online.
  • Low-mileage: When you only drive a certain mileage per year you can receive a discount. If you start driving over this amount, you will lose this discount.

Increased repair costs

This can depend on the type of vehicle you have. Older models are cheaper to insure. Newer models are more expensive to repair, especially electric vehicles. The batteries alone can cost thousands of dollars. One accident can not only hit your pocketbook but also impact insurance rates.

Why Did My Car Insurance Go Up After Renewal?

You may experience a claim mid-policy and not see an increase, then think you are in the clear. Understand insurance premiums are policy-based and will not go up until you renew. Shortly before your premium anniversary, you will receive a notification about your new rate. If you have had an accident, traffic violation, or reported a change to your policy, you will see your new rate.

It is nearly impossible for your insurance rates to remain unchanged from year to year. Just as it is almost impossible for a gallon of milk to remain the same price each grocery store trip. The trend in the marketplace fluctuates from year to year, even from month to month.

Why Does My Car Insurance Increase Every Year?

An insurance company must pay its bills just as you must pay your bills at home. The more you use your electricity, the higher your bill will be. The more insurance claims an insurance company has can reflect how much they will charge their customers the following year, regardless of whether you have filed a claim.

Of course, if you’re the one filing the claim, that is also a reason for the rise in your policy’s premium. You’ve become the risk.

Will Car Insurance Keep Getting More Expensive?

According to the Bureau of Labor Statistics Car insurance will continue to go up. Looking ahead into 2024, they expect an 18.9% increase as what has been seen primarily due to factors such as:

  • Inflation – costs of new vehicles and repairs
  • Rising Medical Costs – charges from medical facilities and doctors
  • Complex Repairs/Technology – newer vehicle repair costs and older vehicle parts location
  • Increased Litigation – settlements for lawsuits that have increased

Do Insurance Rates Ever Go Down?

According to the study above, there are a couple of things states should do to help insurance rates go down.

  • State Legislation – new state laws have recently passed that will assist with insurance costs. Georgia requires a 60-day review before passing any insurance rate increase. Texas law requires reasonable and fair rates. They go as far as demanding refunds if they find a company charging rates they find too high.

Usage-based insurance – new type of insurance. Tracks driving usage and sets rates accordingly. Expected to grow from $57 billion in 2023 to $174 billion by 2030.

What You Can Do to Reduce Your Insurance Rates

It’s time to look forward to your birthday and getting older. Rates will decrease for teens when drivers turn twenty-five. Other things you can do to help your insurance rates can be:

Improve credit score

The first way is to pay your bills on time, especially a credit card bill. If you have outstanding creditors, pay them off. When you do this, you will see a bump in your credit score and could possibly see your car insurance rate go down.

Remove old accidents from your record

Unfortunately, this one depends on the state in which you live. As we discussed earlier, you will need to wait up to five years for an accident to be removed from your record. If it accompanies a DUI, you will need to wait ten years.

Switch to a company that offers more affordable coverage

If you find that your car insurance company charges too much, apply to another company to find more affordable coverage. You may also find better insurance discounts as not all insurance companies offer the same discounts.

Bundle your renters or homeowners insurance with your car insurance

Bundle your policies for discounts. You can find insurance companies that combine homeowners insurance, renters insurance, and if you own a boat, RV, or other four-wheel insurable vehicles with your car insurance to help save money when your policy goes up.

Take advantage of discounts for low-mileage drivers

It can be beneficial to talk to someone live versus applying online. You may miss an eligible discount. One is low-mileage. In the age of COVID, more people are working from home. This benefits those who are now low-mileage drivers and will help keep your auto insurance from going up.

Pay your premium in full, or use autopay

This is one discount many overlook. It is easy to uncheck that box and pay monthly. But were you aware that that box gives you a discount? Also, in some cases, car insurance companies provide even more discounts when you choose to pay for your policy in full.

How To Find Cheaper Car Insurance

Shopping for a policy when you know your car insurance will go up doesn’t have to be complicated. However, it’s important to compare apples to apples. Know what you have and take that information to different companies.

Compare rates

We’ve explained that rates vary between the different car insurance companies. If your current auto insurance provider is going up, it’s time to compare rates. However, it is important to review your current coverage when comparing, especially when you must carry full coverage as with a vehicle under a lease.

Search for discounts

Don’t leave money on the table. Talk with an agent as they ask you about your current situation to assist you in finding every discount available. Student discounts, multi-line, and if you are a member of certain organizations, any discount that can assist with obtaining more affordable coverage.

Adjust your coverage

Remember, if you are not under a lease, then you do not necessarily need full coverage. More is not always better. Base coverage is for the other driver. The added coverage that pertains to your automobile can be adjusted to your vehicle’s worth. You don’t want to be over insured.

Consider that move

Perhaps relocating has been a discussion in your family. When you move, allow car insurance shopping work into the decision-making process. Where you live can cause the cost of your car insurance to go up. It can also allow it to go down.

Why Rates and Quotes May Differ?

When shopping for insurance online, one can get lazy and not enter their real information into search engines using generic info. When one does this, it gives inaccurate information. Here are a few reasons why quotes may differ:

  • Different sites and rates – as we have discussed, not all sites are created equal. Different companies offer different rates.
  • Inaccurate home address – a made-up address will not give you an accurate quote.
  • Not including drivers on policy – Not giving all driver information on a quote or partial information.
  • Different coverages – if you don’t compare apples to apples and select different coverage levels.

What Are the Best Insurance Companies for Cheap Car Insurance?

The best three cheap car insurance companies are:


The gecko we know from the commercials ranks on the list of top insurance companies. They offer low insurance rates and discounts such as anti-theft devices, multi-vehicle, multi-line, and being a member of the military. They also offer discounts for good driving habits. You can obtain these through a smartphone app called DriveEasy. Geico scores an 857 out of 1000 on JD Powers Customer Satisfaction Index. Geico’s average rate for full coverage with a clean record is $1,846.

Bundling, Geico offers life, homeowners, and renters insurance. You can also find motorcycle and recreational vehicle insurance among their insurance products.


The company that is on your side offers a few perks many cheap car insurance companies don’t offer. Gap insurance is one of them. This is important if you total your leased vehicle and still owe money on it. Gap insurance pays off the balance. Vanishing deductible is another benefit. The longer you go without a claim, your deductible is reduced by $100 per year. They also have Accident Forgiveness and rate discounts for students with good grades, going paperless, and multi-policy.

To bundle, Nationwide offers homeowners, renters, and even Pet insurance. Other insurance products they offer include boat insurance, RV insurance, and even dental insurance.


With over 160 years of experience, Travelers Insurance, like Nationwide, offers Gap coverage as well as Accident Forgiveness. They also provide new car replacement, which helps with a new vehicle in the event of a total loss claim because when you drive off, a car immediately loses value. Traveler’s rate with a clean record costs $1681 per year for full coverage.

Traveler’s insurance can include homeowners’ insurance, condo, boat/yacht, and motorcycle insurance.

Bonus: USAA is an insurance company that would be at the top of the list as the most affordable. There is one caveat: You must have an affiliation with the armed forces. This can be through yourself being enlisted, a spouse, or a direct family member. If this defines you, they would be worth looking into.


Why did my car insurance go up without an accident?

There are several reasons why car insurance goes up. If you make changes to your policy, move into a new zip code, or move into a new age bracket, it can affect your insurance premium.

What age does car insurance go down?

Normally, after you enter your twenties, insurance rates decrease. By the time one is 25, your rate will be almost half of what it was when you were 20.

How long does an accident stay on your driving record?

Your driving record depends on which state you live in and the type of accident you have. The average is three to five years. If you have a DUI, it will be ten years.

Can I prevent my insurance rates from going up?

The best way to prevent an insurance rate hike is to obey the rules of the road and prevent violations. Many insurance companies reward safe driving, including lower rates for doing so.

How much is too much for car insurance?

If it protects you on the road and the vehicles around you, then the coverage is worth it. However, if you have an older vehicle, some coverages may not be needed. When your coverage is more than your car is worth, it may be time to reevaluate the policy you have in place.

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