Auto insurance can increase because of your own driving habits and also for reasons that are out of your control, like other drivers — and the economy.
Insurance rates go up for all different kinds of reasons, some of the reasons you can control and some you cannot. Factors such as other driver’s unsafe driving, weather and the economy are all factors that you have no control over.
But, the one thing that you can control is your own driving habits, which is the one factor that is what causes auto insurance increases the fastest.
The Economy Increases Auto Insurance
While this one can’t be seen immediately it does have an effect on your insurance premiums. An insurance company usually doesn’t just have their business dealings in auto insurance. They have investments, they are insuring businesses and homes and they themselves are usually owned by stock holders.
So when the economy takes a down turn and stocks start to fall, businesses fail and homeowners stop paying their insurance premiums insurance companies start to lose money. They have to still turn a profit so that their own stock holders don’t start selling their stock and they do this by raising rates on the clients they still have, including car insurance customers.
Statistics Increase Auto Insurance
Insurance is all about numbers and insurance companies love statistics. Statistics show what categories of drivers are the safest, what geographic locations have the highest theft rates and what credit ratings are most likely to commit insurance fraud. A negative change in the statistics of any of the categories that you are in can make your insurance go up at your next renewal.
Other Drivers Increase Auto Insurance
Your driving record is not the only driving record that can make your insurance premiums go up. Drivers that are not even insured with your insurance company have a large impact on making insurance premiums go up, especially uninsured drivers. When an uninsured driver hits another driver that is insured with your insurance company, your insurance company has to pay out for the damages for their driver (if there is coverage).
This means that there is no other insurance company to reimburse your insurance company and getting the money that was paid out for the accident from the other person can take a long time. So to make up for the money they had to pay out, they increase everyone’s premiums.
You Make Auto Insurance Increase
The only factor that you have any real control over is your own driving habits and how safe of a driver you are. Drivers that cause accidents and are ticketed for unsafe driving are going to be charged higher insurance rates. Insurance companies want to collect as much premium as they can on these unsafe drivers before they cause the accident that they are at high risk to.
Driving safe and obeying traffic laws will keep your insurance premiums down. Also if you are a good driver and go a certain period of time without a ticket or an accident, not only will you be paying lower rates, you could also qualify for good driver discounts that could decrease your premiums even further.
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