Why Does My Auto Rates Go Up If I Have No Claims?


You’ve made the right choice for your car, which is getting it insured in the event the unexpected happens. But then, your auto insurance portfolio can become frustrating if your insurance premium is continuously rising even without filing claims.

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You’re hardly alone. According to Business Insider, approximately 5.6 million Americans planning on renewing their auto policies in 2020 should expect rise in premium rates.
The truth is, there are various factors (within and outside your control) that can contribute to the increase in car insurance premium rates. Understanding the underlying factors can help you better negotiate the price and find an insurance company that will offer the best coverage

Factors affecting your premium that’s within your control

Your driving history Granted, you could have been a cautious driver all the while, but some things happen so fast. If you’re involved in a collision and at fault, your auto policy rate might as well climb up. Besides that, a history of convictions or violations of driving rules would also count.
Your choice of provider and policy type Different insurance providers have varying rates, mostly based on how they perceive risks. As such, your car insurance company would value your premium based on your unique circumstance. Also, the type of coverage you choose will likely affect the cost of your insurance premium.

Policy cancellation or change in plan structure
When you cancel a policy, you lose any discount that comes with it. Equally, if you remove a vehicle from an active policy, such as deregistering your second car, this might increase your premium rate for the first car. A change in rates or additional services charged by your insurance company can impact the cost of your premium even if it goes unnoticed.

Your choice of car
In case you don’t know, your car’s mechanism plays a vital role in determining your car insurance rate. Modern vehicles with built-in security features and other advanced driver assistance system technologies would mean paying higher premiums.
Other factors you should be aware of include change of employment, change of address, medical conditions, human error, among others.

Factors affecting your premium rate outside your control

State laws
In many states, car insurance is mandatory, with varying laws in terms of auto liability coverages. For instance, Florida’s liability coverage in 2017 was $964.28 compared to Iowa’s $339.12.

Natural Disasters
Natural disasters like hurricanes, floods, hail storms, among others, often cause insurance companies to raise their premium rate to make up for any financial loss.

Increase in Vandalism and Car Theft
When your insurance companies notice patterns of vandalism or car theft in your area, they will most likely increase your car insurance rates. You may have to consider installing anti-theft systems if you think that would be advantageous.   

Suppose you’re not affected by external factors despite not having claims, you owe it to yourself to contact your car insurance agent and review your policies and identify what part of your premium had gone up.

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