A automobile collision would be a one-two punch in life, if it were a boxing fight. Of course, the first part is the collision. You probably simply want to put it all behind you once you’ve made sure everyone is okay and taken care of all the insurance-related details. And that’s when you receive the second blow: not only are you now responsible for paying for the required vehicle repairs, but your auto insurance rate is also going up.
Most consumers are aware that certain events will result in an increase in their auto insurance premiums; for example, getting into an accident, receiving a few speeding tickets, or adding a young, male driver to the household. But occasionally, you might be surprised to open your insurance bill and see a new, higher rate glaring back. You don’t have any teenagers living at home, you drive defensively, and you’ve never been in even a minor collision. How come?
Your auto insurance premiums could increase for a variety of causes, which are rather many. But it’s possible that your agent failed to mention these reasons to you when you originally joined up, or that you’ve forgotten about them over time. The following few pages go over five uncommon causes of rate increases and what you can do to avoid them. If you can’t stop them, at least you’ll be aware of their impending arrival.
You’ve Reached the Big 5-0!
Being 50 can be difficult on your mental health, but when your insurance rates increase because you are now viewed as a “older” driver who is more likely to get in accidents, you might feel even older [source: Casey]. Although not all insurance companies do so, it is undoubtedly a frequent practice. Which is intriguing given the National Highway Traffic Safety Administration reports that drivers between the ages of 64 and 69 are the safest [source: Woodyard]. But there’s a little more to it than that, of course. While older Americans generally drive quite safely — they frequently use seatbelts, for instance, and rarely drink or text while driving — those who are 85 years or older had the highest crash rates per mile driven of any age group [source: NHTSA]. Conclusion: If you’re over 50, it can be expensive.
4: Your credit rating is bad or low
Most auto insurance view those with bad credit as being more risky and increase prices accordingly. Why? If you have a negative credit score, you’ve undoubtedly missed a few mortgage or credit card payments or written several bad checks. As a result, you’re a less dependable insurance client because you might occasionally forget to make a payment [source: Roberts-Grey].
The practice of using credit scores to estimate insurance premiums is somewhat debatable. Credit scores and on-time bill payments don’t always go hand in hand [source: Dykman]. Additionally, insurance providers frequently fail to disclose to their clients that credit scores are taken into account when determining premium costs. If this worries you, find out from your agent if the business takes credit ratings into account. Go somewhere else if they do so or if the agent muses.
3. You begin accruing more mileage.
When you give it some thought, this one makes sense. You are more likely to be in an accident the more kilometers you drive annually. The excellent new job you’re all happy about, the one that’s an hour away from home, may therefore result in a higher vehicle insurance cost since your insurance company is now more at risk as a result of you driving more. Ask your company what its specific policies are in this area if you have any concerns because there isn’t a set number of extra miles that all insurers will boost premiums at [source: My Car Insurance Rates]. Also keep in mind that you might be able to get your rates lowered if you suddenly start driving fewer miles.
2: Your friend totals your vehicle
We are aware that you weren’t operating the vehicle. So how does your insurer have the right to penalize you for someone else’s poor driving? The truth is that if your friend steps forward and pays for repairs himself, your insurer has nothing on you. However, you will need to submit a claim to your insurance provider if this friend of yours is unable or unwilling to pay. And once you submit that claim, your rates probably will too. Sure, it’s unfair, but that’s how the system operates.
There is one bright spot. There’s a significant chance you won’t be held responsible for the damage if you didn’t grant your friend permission to remove your wheels in the first place. Although the owner of the other vehicle may approach you for medical costs and any property damage if the collision involves another vehicle, your car-nabbing pal is uninsured, and the consequent damage exceeds your policy limits [source: MSN Money]. The lesson of the tale is to pick your friends carefully. Shakespeare also said that neither a borrowing nor a lender should be.
1: You’re Not Married
Married folks appear to be the luckiest ones. They live longer in general. Additionally, research indicates that married people (and, incidentally, anyone with a good credit rating) are significantly less likely than single persons to be involved in accidents or commit other driving infractions [source: J.D. Chapman Agency, Inc.]. Additionally, if a married individual is in an accident, it will probably be less expensive than if they were a single person. Unsurprisingly, some insurance providers raise the premiums for their single customers regardless of their driving records in response to these figures [source: J.D. Chapman Agency, Inc.]. Who is winning when it comes to risk evaluations by insurers? Well, it appears that married, middle-aged women who don’t smoke are the group with the lowest risk.
