Why Did My Car Insurance Rates Go Up?

Learn more about why your auto insurance rates go up and how to lower them.
man upset by something on computer screen

Did your auto insurance rates just go up? If so, your increase could be due to any number of reasons. This article will help you understand why your premium suddenly costs more and what you can do to lower it.

Many things could have caused your premium to jump. Prices could even go up if you’re a safe driver who avoids tickets and accidents. New risk factors in your area and inflation could raise coverage prices. For example, you’re likely to pay more if you live in a big city, says the Insurance Information Institute (III). This is because more people equal more cars, meaning more collisions and more claims. So, your premium could rise even if you have a squeaky clean record just based on where you live.

Though there’s a chance you’ll face a rate increase if you’re a safe driver because of things out of your control, costs are more likely to go up if you appear to be a high-risk driver. Most of the time, you’re a high-risk driver if you file lots of claims, get in at-fault accidents, or have points on your driving record. However, insurers see teens, seniors, and high-volume drivers as high-risk, too.

Rates too high? Find a better car insurance deal now

Get better coverage, lower rates, or both by comparing quotes with our fast, easy-to-use form.

Advertiser Disclosure

What Affects Your Car Insurance Rates?

Ultimately, companies look at several factors when deciding your rates. If any of these factors happen to change, your premium could, too. The following is a list of common rate factors:

Insurers change your prices largely based on these factors. But it mostly comes down to how likely you are to file a claim or cost your provider money. Below are some primary reasons you’ll find an increase in your premium:

You Got Into an Accident

Getting into an accident will increase your auto rates. Drivers who file claims for at-fault accidents will look like a risk to cause one again. In some states, you might also face higher costs even if you’re not at fault. So, if you often file collision claims, that could be why your rates went up.

You Got a Ticket

It’s no secret that police pulling you over isn’t good for your auto rates. You’ll appear at risk to get in an accident if you get too many traffic violations. Also, your premium could go up even more depending on the severity of your violation. For instance, DUIs and reckless driving will raise premiums much more than speeding tickets for going five over the limit.

It’s important to note that insurers will only raise your prices for moving violations. According to Progressive, non-moving violations, such as parking tickets, are unlikely to affect your rates.

Your Credit Score Went Down

You’re likely to see an increase in your premium if your credit or FICO score went down within the last year. Many of the major insurance companies look at your credit score when they choose your rates. Providers see those with lower credit scores as a risk to get into an accident and cost more money. You don’t have to worry about this in every state, though. These states don’t allow insurers to use credit scores to decide rates:

Your Marital Status Changed

For the most part, rates are lower for married couples. This is because insurers view married couples as safer drivers. As a result, they give them cheaper prices. So, you might see some higher rates if you’ve recently gone through a divorce.

You Moved

Moving affects your rates, even if it’s not out of state. Insurers look at claims in your area and factor them in when they decide rates. That means your zip code could impact your premium without you even filing a claim. Your rates will be more expensive if you move to a city with lots of claims and collisions. Where you park your car matters, too. Rates could rise if your new home’s parking situation is unsafe and you end up filing break-in claims.

You could even pay more for auto coverage in one state than you would in another. Population sizes, laws, and the total number of accidents can affect insurance prices across different states.

You Drove More Than You Did Last Year

You can expect rates to climb if your mileage increased over the previous year. In the eyes of insurers, you’ll have a bigger chance of being in an incident if you’re behind the wheel more often. Maybe you’re driving more because you moved farther away from work or because gas is cheaper. Whatever the case, prices will likely go up when your annual mileage increases.

Claims in Your Area Went Up

An increase in your premium could be due to a rise in the number of claims in your area. According to Staci Pappazi, an independent agent and owner of Pappazi Insurance Agency in San Diego, California, “bodily injury claims and fatalities are up, causing higher rates for everyone.” Pappazi adds that “insurance is based on the fact that everyone puts money into a pool, so everyone is affected if claims go up.” Claims cost your insurer lots of money. So, they must raise everyone’s rates to keep up with the costs.

Also, consider the effect of natural disasters on your rates. Natural disasters, such as fires or floods, cause a spike in comprehensive claims across the entire area, which raises your premium. “Just because your car didn’t get damaged, doesn’t mean your neighbor’s didn’t also,” says Pappazi.

You Had a Lapse in Coverage

Your rates could increase if your policy lapses. This happens when you don’t have coverage for a certain amount of time. To avoid a lapse, you can check out options such as non-owner insurance to make sure you always have protection.

You Lost Some Discounts

Another cause for an increase in your premium could be that you lost discounts you used to qualify for. For example, students could lose their good student discount once they graduate or if their grades go down.

Below are some common policy discounts and how you can lose them:

  • Good student. You left school or had lower grades on your last transcript.
  • Multi-car. You removed a vehicle from your policy and lost your multi-car discount.
  • Bundled policy. You were bundling policies with your provider but removed renters, home, or life.
  • Safe driver. Some insurers will reward you with a safe driver discount. Your discount could go away if you get into an accident or get a ticket.


Your rates could also go up because of your age. People aged 60 and above typically have higher rates than younger drivers. This is because providers see senior citizens as higher-risk drivers. A 2018 report by the CDC showed that more than 7,000 drivers over the age of 65 died in car crashes, and about 250,000 sustained injuries. So, even if you’re a safe driver, insurers will still think you’re at an increased risk to get in an accident as you age.


Inflation is one of the most common reasons your auto rates will increase. Claims end up costing insurers more because of inflation. Per Pappazi, “the cost of parts for vehicles has gone up due to inflation. And, as claims become more expensive for insurance companies, so too will your rates.” Unfortunately, there’s not much you can do about inflation. It’s an inevitability as time goes on.

Price Optimization

Your rates could go up because of something called price optimization, which is a method insurers use to maximize the prices they’ll charge consumers. Insurance companies use consumer data, advanced tools, and various techniques to find out the highest price you’d tolerate before you decide to shop around for new coverage.

This means that your rates could be increasing because your provider “optimized” your premium. Whether you tolerate that is up to you. But why should you when it’s so easy to switch to another company for a better deal?

Price optimization isn’t legal in all 50 states, though. 20 states have banned the practice, including:

How to Lower Your Premium

The bottom line is that many factors can affect your auto insurance rates. Anything from lowering your deductible, raising your limits, getting more coverage, and many other factors can change your rates. There are also things out of your control such as:

  • Losses
  • Increased insurer expenses
  • Inflation

For the most part, however, the ball is in your court. You can take steps to lower your rates even if your driving record has blemishes or as you age.

The following are some ways you can lower your premium:

Switch Companies

Just because one company raises your rates, doesn’t mean you won’t find a better deal elsewhere. Another insurer might be able to look past the things raising your rates at your current company. Or another provider might offer lower prices because they have fewer company losses.

Many factors go into pricing your premium, and you might find better prices by switching to another insurer. Try comparing rates between companies to get the best deal.

Look for Discounts

You could lower your rates by looking for discounts. Insurers offer a variety of ways for customers to lower rates. Some are easy to qualify for, while others take some effort.

A few examples of popular auto discounts include:

and more could help keep your rates down. One of the best ways to lower your rates is by bundling your coverages. Per AmFam, bundling home and auto could save you around 20%.

Talk to Your Agent

Talking to your insurance agent is another good idea for lowering your auto rates. First off, they can help educate you on why your rates went up to begin with. Independent agent Staci Pappazi says that “agents help people have an understanding. The basis of my business is to educate my clients. They may not be happy that their rates went up, but at least they’ll know why and what they can do about it.”

An independent agent is especially useful if your premium went up unexpectedly. They aren’t tied to any one carrier, so they can help you shop around if need be. If you saw a rate increase, your agent will be happy to help you find a solution.

Be Careful about Who You Add to Your Policy

Adding a driver to your policy could raise your auto rates. For instance, adding a teen driver or someone with a bad driving record could badly affect your premium. To keep rates reasonable, be careful with whom you add to your policy.

Also, remove someone from your policy as soon as possible if they cause an accident or receive a citation for something serious. It’s not a guarantee, but you could avoid a spike in your rates by removing a high-risk driver.

Keep an Eye on Your Rates

You can ensure your rates are at the lowest they can be by keeping an eye on them. Insurance companies aren’t always perfect. They could make an error when deciding your prices. You could save money by paying close attention to your premium and reporting any issues or concerns to your insurer.

Drive Safely

The most effective way to keep your rates down is to drive safely. It may seem obvious, but it’s true. Staying out of accidents and avoiding costly tickets and violations will save you a lot of stress and money in the long run. Your insurance provider might even reward you with a safe driver discount if you keep it up for a long time.

Frequently Asked Questions

Why did my rates go up for no reason?

Rates sometimes seem to go up for no good reason. The truth is, there’s always a reason when your premium increases, but but it’s not always an obvious one. Insurance carriers hand out prices by looking at rate factors like age, car make/model, where you live, and more. Your rates could go up if any one of these factors changes.

Why is my premium going up every year?

Your insurance could go up yearly for many reasons, but one of the most common is inflation. Your rates could increase as markets change every year. Another reason premiums steadily increase is price optimization, which sounds positive, but is designed to test how much you’ll pay before jumping ship to another carrier. Pricing optimization is one of the main reasons you should get a quote every year to test the market.

What can I do if I caused an accident and my rates went up?

If you caused an at-fault accident, your rates are sure to go up. You could also end up as a high-risk driver. Unfortunately, there’s not much you can do about your costs in this case. Time is really the only cure. In general, accidents remain on your record for three to five years. However, this varies by state.

In the meantime, you should try to find any way to lower your rates. This includes:

  • Shopping around
  • Finding discounts
  • Putting together a few years of safe driving

Related Articles: