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What Causes Car Insurance Rates to Go Up?

car insurance rates

An alarming amount of Millenials today harbor misconceptions about insurance. This lack of understanding can put them at risk of being underinsured and lead to coverage gaps that get claims denied.

For example, the color of a car has no bearing on the cost of insurance. At some point, this urban myth was widely proliferated, and millennial drivers are likely to believe it. Additionally, if drivers only shop with price in mind and no concern for policy details, they could find themselves on the hook after an accident.

To find out what really increases car insurance rates, check out the information below.

Driving Record

Of course, a drivers’ record and claims history is one of the biggest factors in their car insurance rate. The more accidents, the more they pay.

For those with a recent accident on record, their insurance company may apply a surcharge. This is a temporary hike in a car insurance rate meant to insure the driver makes responsible choices for a period of time until their risk assessment evens out.

Even if the driver is not at fault, if they have many accidents, they are perceived as a high risk. This is also true for drivers who file many claims for other types of damage, like hitting wildlife or broken windshields.

The best way to keep a low car insurance rate is to drive safely and avoid accidents. Also, consider paying out of pocket for minor damages.

Traffic Violations

There is a myriad of common traffic violations that are practically guaranteed to raise a car insurance rate. Some of them include:

  • Speeding
  • Hit and run
  • Illegal turn
  • Reckless driving
  • Failure to stop
  • Failure to yield
  • Driving under the influence
  • Driving with an open container
  • Driving on a suspended license

This is not the complete list of traffic violations that may increase car insurance rates, but it’s safe to assume that just about any traffic violation will do so.

Credit Rating

How do car insurance companies set a premium for each driver? Part of the process involves using a credit-based system to determine the amount each driver should pay. Drivers with a worse credit rating are often deemed higher risk, and therefore pay more.

The best way to minimize the impact of your credit rating is to reduce your credit usage and loans and try to pay your bills on time.

Miscellaneous Causes

There are a few other miscellaneous factors affecting car insurance rates, including:

  • Age
  • Gender
  • Location
  • Marital status
  • Car make and model
  • Adding drivers to the policy

Sometimes, car insurance companies will even increase rates across the board due to national trends or statistics.

Shopping for the Best Car Insurance Rates

The best car insurance rates are usually granted to the best drivers. However, a driver has some measure of control over their own premium. Avoiding accidents, limiting claims, reducing traffic violations, and improving credit will make a huge difference.

To shop for the best car insurance rates around, contact us for professional guidance.

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