Car Insurance Rate Increase but NO Claims
Auto Insurance | Planning to file a claim with your auto insurance provider? Here’s what you should know before making the decision to file, because your premium rates may increase substantially. When the cost of your car insurance goes up at renewal, the increase can feel unjustified — especially if you’ve been insured with the company for a long time and haven’t had any tickets or accidents. Auto insurance rates aren’t determined by one-size-fits-all rules. Whether your rates change — and by how much — is dictated by numerous factors. No insurance agent and no blog can 100% accurately determine how much your insurance rate will jump after a ticket or accident.
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How to save money on car insurance
When it comes to lowering your auto premiums, you’re in the driver’s seat
Having adequate car insurance is both smart and prudent, but there’s no question that it adds to the expense of driving. The good news is that premiums can vary by hundreds of dollars depending on a number of factors. Review your coverage at renewal time to make sure your insurance is in step with your needs, and follow these practical steps to reduce the bottom line on your auto policy.
Shop around for your car insurance
Prices differ from company to company, so it pays to shop around.
Get at least three quotes, from both different insurance companies and different types of insurance companies—that is, those that sell through their own agents; those that sell through independent agents; and those that sell directly to consumers via the phone, an app or the Internet. Ask friends and relatives for their recommendations based on their experiences, and do your own due diligence by researching the company before committing.
Understand auto insurance enough that you can ask a prospective insurer informed questions. Anyone you speak to should take the time to answer to your satisfaction. Remember, these are the people you’ll rely on if the worst happens and you need to make a claim.
Keep in mind that the lowest price isn’t always the “cheapest” option. Make sure the company you choose is reputable, and that you’re comfortable with the service you get from the insurance professionals you speak to. Your state insurance department or online consumer information sites may provide information on consumer complaints by the company to help you choose the right insurance company for your needs.
Compare insurance costs before you buy a car
Auto insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of car theft or personal injuries, or for cars that are known to be safe. When you’re comparing new or used vehicles to purchase, also research what each will cost to insure. To start, you can check safety rankings for specific models with the Insurance Institute for Highway Safety’s (IIHS) online Top Safety Pick rating tool.
Raise your deductible
By choosing a higher deductible on your car insurance, you can significantly lower your premium costs. Of course, be sure you have enough money set aside to pay the higher deductible in the event you have a claim.
Reduce optional insurance on your older car
As a rule of thumb, if your older car is worth less than 10 times the insurance premium, having collision and/or comprehensive coverage may not be cost-effective. To find out whether this is true for you, check the value of your car. You can look up what your car is worth for free on websites such as Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar.
Bundle your insurance and/or stick with the same company
Many insurers will give you a discount if you purchase two or more types of insurance from them—such as homeowners and auto—or have more than one vehicle insured. Some companies offer a price break to longtime customers. There are no guarantees so do your homework and compare costs for a multi-policy discount from a single insurer with buying your insurance separately from different companies. Read more here…
You probably already know a host of personal data affects how much you pay for all kinds of insurance, including auto, homeowners, renters and even life and health. Those data can include your age, credit score, driving record, claims history and value of the property you’re insuring, depending on the policy. At its most basic form, the premise of insurance is sharing risk and shouldering costs with others.
Why did my auto insurance costs go up even when I didn’t file a claim?
Auto insurers price their policies based on a number of factors. Sometimes these cost factors go up, and sometimes they go down. In most states, costs are currently rising. Your actions, as a policyholder, can affect what you pay, too. For instance, if you add another car or a teenaged driver to your policy, your costs will increase. Alternatively, your costs will decrease if you drop either a car or a driver from your policy.
But there are also other factors outside of your control that could cause rates to increase, such as the crashes other people are involved in. The number of crashes and the cost of these crashes are a component of auto insurance pricing in every state. For example, drivers living in large metropolitan areas are likely to pay more. This is simply because more cars, therefore more crowded roadways, increase the number of car crashes in those cities. On top of all that, speed limits are also being raised. Speed is the single biggest contributor to crashes in which driver error is cited as the cause. Distracted driving is an issue everywhere. In big cities and small, people texting, talking or otherwise occupied with another activity while driving is being blamed in part for more crashes.
Auto insurance covers more than vehicle repair. It also covers the cost of injured crash victims’ medical care and lost wages as well as the repairs and/or replacement of vehicles and any property damaged in a crash. In recent years, medical and auto body repair costs have increased at a rate much faster than inflation. Legal costs have gone up, too.
Another trend affecting the cost of auto insurance is that with the unemployment rate falling, more people are driving both to and from work. And with more disposable income, they are presumably driving more for leisure. They also have the means to purchase more expensive cars. And while many of these cars have all types of safety features that might help in accident avoidance, these cars’ often high-tech components are also more expensive to fix and replace once damaged.
Auto insurers are committed to reducing U.S. crash rates. They fund the Insurance Institute for Highway Safety (IIHS), support efforts to combat distracted driving as well as drunk or drugged driving. In addition, auto insurers offer discounts to policyholders who take defensive driving courses or drive fewer miles. Read more…
What’s next?
No one wants their car insurance rates to increase as the result of a car accident.
But if you hide an accident from your insurance company by paying for another driver’s auto repair costs out of pocket, you could expose yourself to trouble later on. That’s why experts and car insurance companies recommend reporting an accident with another driver as soon as it happens.
If your rates increase after filing an auto insurance claim, you can work on reducing them over time by making sure your driving record remains clean, without accidents or traffic tickets.
I really appreciate your take on Auto Insurance Rate Increase But No Claims? Too bad more people don’t think that way. Great article.
Comments like yours keep me writing, Alyssa Kotai. Thanks for contributing.