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What Increases the Cost of Insurance?

Written by Michele Wilmonen. Posted in Research Last Updated: 10/31/2015

Why you have such a hard time finding out if your cost of insurance will go up.

cost of insurance

Whether your cost of insurance goes up or down, only your renewal will tell.

We get a lot of questions at Car Insurance Guidebook, but one of the most common questions is from people asking if their cost of insurance will increase. They could be asking because they just added a teen driver, because they just got a speeding ticket or because they were just in a car accident.

In most cases we can usually give you some sort of guidance as to the likelihood that the cost of insurance on your vehicle will increase, but not all the time.  The reason we can’t give you a sure answer on an increase or how much an increase will be is because:

  1. Each insurance company rates drivers and vehicles differently
  2. Each state allows for different rating practices
  3. There are many different factors used to determine the cost of insurance for a policy

Because there are no constants in insurance when it comes to creating an insurance premium, there are no consistent answers we can provide. However, there are patterns that are seen when it comes to insurance premiums, which is where we provide our guidance from.

Here are the top three questions we get and what we can tell you on how they will affect your cost of insurance.

Will a Teen Driver Increase my Cost of Insurance?

Yes, adding a teen driver will definitely increase your cost of insurance. However, we cannot tell you as to how much it will increase your policy.

Just like any adult driver, teen drivers all are rated differently due to discounts and age.

The Cost of Insurance after a Ticket?

This one is most likely a yes. Insurance companies do not like it when their clients get traffic tickets as this increases the chances that they will have to pay out for a claim later on down the road.

Now, the type of ticket will greatly determine whether or not you will see your cost of insurance increase or not. A ticket for speeding or reckless driving will just about guarantee an increase, while a ticket for a tail light being out will not.

How Much Will my Cost of Insurance Increase after an Accident?

There is no one anywhere that can tell you how much your insurance premium will increase after a car accident. They can usually indicate whether or not it will increase, but not the amount it will.

This is because all of your information is entered into the underwriting computer at your renewal for the computer to determine how much your insurance will be next term. It is not until after the computer has calculated everything that a premium is created. So until your renewal actually processes, the cost of your insurance for after a car accident is really an unknown.

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Michele Wilmonen

Michele’s first introduction to insurance was working for a major insurance company as a file clerk and a mailroom supervisor in a regional office. She learned insurance directly from underwriters and claims adjusters from questions and also watching them do their job. Since then, she’s earned a number of insurance certifications from the Insurance Institute of America and also a Bachelor’s degree from the University of Idaho. She blogs at Car Insurance Guidebook.

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