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Insurance Rates Explained: Why Did My Car Insurance Go Up?

Sharon Brezner

You open your auto insurance bill, and you are wondering “why did my car insurance go up?”

If something about your situation has changed—you bought a new car or recently had an accident, for example—you’re probably expecting the increase.

But what if nothing appears to have changed? What would explain the sudden increase in your car insurance rate?

Key Insurance Rate Factors

When calculating your car insurance quote, most auto insurers look at a number of factors that, through statistical modeling, help them determine how likely you are to have an accident or another type of claim. The factors, which can influence your car insurance policy rate, fall into three main categories: you, your car and how you drive.


Car insurers start with basic demographic information such as your age, gender and marital status. For example, older and more experienced drivers tend to have fewer accidents than younger drivers, and single drivers tend to have more accidents than married drivers. Where you live is also considered. An urban setting may mean you’re more likely to have an accident or be the victim of theft.

Insurance companies will also consider credit reports and prior insurance. Drivers who have positive information in their credit report are more likely to pay their premiums and keep their insurance in force. Furthermore, drivers who keep their insurance in force are less likely to be involved in accidents and moving violations, and thus, are generally charged lower rates.

Some companies may also consider your profession, especially if there is a strong link between what you do for a living and how much and how far you typically drive.

Your Car

Generally, the more important factors related to your car are its age, make and model. Statistics on those characteristics help predict how likely the car is to be stolen by thieves or in an accident, as well as how much it would cost to repair or replace it in the event of a claim. Some companies also consider the safety rating, and age of the vehicle. Safety and security features, such as collision avoidance technologies or anti-theft devices, may make you eligible for discounts or credits that help lower your costs.

Don’t Help Crooks Steal Your Car

Your Driving Habits

One of the biggest factors that influence your rate is, of course, your driving record. Drivers who have been in an accident or have violations—a speeding ticket, for example—are more likely to have additional accidents or violations in the future, and therefore, their rates tend to be higher.

Insurers also look at how you use your car. Do you have a lengthy work commute through congested highways? Alternatively, are you retired, using your car mainly around town or for the occasional weekend getaway?

Of course, depending on your company and your state’s laws and regulations, your insurer may not be using all of the factors described above, or they may be considering other factors not listed here. Generally, these are the most common, and when you have a change in any of these factors, it often triggers a change in your rates.

However, what’s happening when your costs have changed even though your own individual situation has not?

Why Did My Insurance Go Up?

One apparent reason that insurance rates go up is inflation. As the costs associated with claims increase due to inflation—costs for medical expenses and vehicle repairs, for example—companies adjust their rates to cover these higher expenses.

In addition to inflation, other drivers can impact your rates. It’s important to remember that the money an insurance carrier collects from you and the other drivers it insures is pooled together to help pay the collective claims of those drivers as a group. Therefore, if the frequency or severity of accidents increases, insurance companies will generally adjust their rates to cover the resulting claims costs. This means that your rate may increase, even if you’re not involved in an accident.

It is mainly due to increased frequency and severity of accidents that auto insurance rates began to climb to some of the highest levels seen in more than a decade. Some of the trends behind these increases may surprise you.

On the Road Again

The recovering economy, lower unemployment rates and lower gas prices are generally viewed as positive trends for consumers. However, the combined effect of these trends is that there are more drivers on the road, logging more miles.

According to the U.S. Department of Transportation, in just the first quarter of 2016 alone, Americans traveled more than 740 billion miles on the roadways—20 billion more compared to the same quarter in the previous year. Unfortunately, more drivers spending more time on the roads mean more accidents as well.

Driving Us to Distraction

From eating to monitoring a GPS to texting or talking on a cell phone (even hands-free), drivers are spending more time multi-tasking in their cars and less time on the main task at hand: driving. Among distractions, texting is considered especially dangerous because it requires us to take our eyes off the road the longest.

According to AAA Foundation’s 2015 Traffic Safety Culture Index, 77 percent of drivers said texting while driving is a serious threat to safety and 80 percent find it unacceptable. Yet, 42 percent of the same respondents admitted to reading a text or email while driving, and nearly a third (31.3%) typed one. Another study, from the Virginia Tech Transportation Institute, found that drivers who text are 23 times more likely to be involved in a crash than those who drive without any distractions.

More Technology in Cars Means More Expensive Repairs

Many of today’s new vehicles feature technologies designed to make cars and driving safer, including backup cameras, blind spot detection systems and smart headlights, to name a few. Experts suggest that, in the long-term, these technologies could help reduce the number and severity of accidents and, as a result, help lower auto insurance rates.

In the short-term, however, this technology is more expensive to repair or replace when the vehicle has been in an accident. For example, a basic grille emblem costs about $50 to replace. But, in some cars equipped with adaptive cruise control (ACC), the ACC unit requires a special “see-through” grille emblem that can cost over $950 to replace, says Greg Horn, Vice President of Industry Relations at Mitchell.

What Can You Do to Keep Car Insurance Rates Down?

There are certain factors that affect your rates that you can’t readily change—your age, for example. But you can significantly impact your own driving behaviors, which helps both you as an individual and the larger pool of drivers. If you take steps to drive safely, you may be able to reduce the likelihood of an accident. Here are a few tips:

Don’t Speed

According to the National Highway Traffic Safety Association, traffic fatalities were up in 2015, reversing a trend in which fatalities had been steadily declining since 2000. Researchers attribute the increase, in part, to states raising maximum speed limits.

Don’t Be a Distracted Driver

Remember that distracted driving is not just about texting, emailing or talking on the phone. Distraction also includes behaviors such as eating, trying to attend to children or having a heated conversation with a passenger. Make a commitment to keep your eyes on the road, your hands on the wheel and your mind on driving.

Take Extra Care in Adverse Weather

It’s not just snow or ice that requires extra caution. Even wet roads from rainstorms lead to increased crash rates, often because drivers don’t adjust their driving habits to navigate slippery conditions safely . Slow down, brake more gradually than you usually would and put more distance between your car and the vehicles around you.

Are you looking for more insurance 101 tips?  Find them in our monthly newsletter.

Disclaimer: This article is intended to be informational in nature, may not be current, and is subject to change without notice. Please contact your agent or carrier for your specific coverage implications.


11 Responses to "Insurance Rates Explained: Why Did My Car Insurance Go Up?"

  • Joseph L. Sexton | August 10, 2019 at 5:20 pm

    Interesting BUT you never mentioned AGE. Even with a PERFECT driving record insurance premiums go UP,merely because G-D let you hit an age milestone. And NO I do not think it's fair & sometimes a low credit rating not due to one's own fault also is NOT fair, mine is 832. BUT I'm, 77 & age does factor in.

  • question mark transparent | August 9, 2019 at 8:20 am

    I conceive you have mentioned some very interesting details , appreciate it for the post.

  • Extra Mile Staff | May 3, 2019 at 6:10 pm

    Hi Aleksandr, you can call our customer service agents to talk about your policy here: 1-877-896-9320 M-F: 7 a.m. to 11 p.m. ET Sat: 8 a.m. to 5 p.m. ET

  • Aleksandr Kalika | May 1, 2019 at 7:09 pm

    1. The last 5 years after we retired my spouse and myself drive less then 3000 miles a year and only at a distance below 10 miles. How can we have a insurance discount for that? 2. Can we have an insurance discount if my spouse will stop driving and I will drive our car alone?

  • Extra Mile Staff | November 27, 2018 at 2:21 pm

    Hi Howard, this is an excellent question. You can call our customer service center at 1 (860) 547-5000 and talk to one our agents to understand how this can affect your specific policy. We do offer a driving safety course through AARP: Check it out!

  • Howard Spinner | November 27, 2018 at 6:24 am

    I just received a moving violation (failure to stop at a stop sign) out of state on my rental car. I have not had a moving violation in over ten years. How would this affect my car insurance premiums with The Hartford? I am able to take an online defensive driving course to dismiss this charge, so would doing so be the best option? If there would be no effect on my insurance premiums, then I would pay the traffic fine for this violation.

  • Karin Rapaglia | July 15, 2018 at 1:22 pm

    the explanations you provide are well and good. However, it would behoove you to notify your customers of such increase prior to sending out the renewal bill. I would have shopped around to see if I could get a better deal. I'd like to talk with you about my insurance policy to see if there is anything I can do to lower the premium...

  • Extra Mile Staff | March 22, 2018 at 12:01 pm

    Hi Garry, You can easily add your Smart Driver Course credit online on our Customer Service Center. If you’d prefer to speak to a representative, please call us at 1-800-423-6789 and we’re happy to help. Thanks!

  • Garry Ray | March 20, 2018 at 7:49 pm

    How do I send The Hartford my certificate of completion of the 4 Hour AARP Smart Driver Course?

  • Michael jentz | November 16, 2017 at 10:00 pm

    My wife and I are safe drivers we don't get tickets we never eat or drink or text or are distracted in any way when we drive when we drive we just concentrate on driving and of course we are sober my cars are older but they are valuable to us and we do not want to be involved in accidents there for we are defensive drivers and are aware of cars or traffic all around us in case we have to Swerve

  • Rosa T Doporto | October 25, 2017 at 3:18 pm

    I have read the information and I still can't believe my rate can be that high. I carry LIABILTY only and it's still quite high. I can't understand it.

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