An increase in the cost of auto insurance can be frustrating, especially if you haven’t had any accidents or tickets. Although there are several reasons which could cause your rates to increase, it’s important to remember that the type of claims you make could have an impact on your discount or rating. These types of claims and their impact on your insurance may also vary by province.
Here are some potential reasons for an insurance rate increase
1. Traffic tickets
The more traffic tickets you have, the more likely you are to cause an accident than other drivers with no tickets.
Insurance companies won't increase your insurance premium because of a parking ticket.
2. At-fault accidents
Just like traffic tickets, at-fault accidents on your driving record may cause your car insurance premiums to increase as you no longer have an accident-free driving record.
3. Adding drivers and cars
If you add a car onto your policy or replace an existing car with a newer one, your insurance premium may go up if your new vehicle costs more to replace or repair than your old car.
Adding other drivers, newly licensed driver, and drivers under 25 years of age to your existing insurance policy may also cause your insurance premium to increase. Each driver's premium is based on their years licensed and driving experience.
4. High insurance claims in your area
Your car insurance rate may increase based on where you live. Certain areas may have higher weather-related claims, motor vehicles accidents or theft that can affect the price.
5. Loss of insurance discounts
Your eligibility for certain discounts may depend on your driving record. Accidents or traffic tickets may cause you to lose any associated discounts.
6. Your insurance coverage selections
The insurance coverage you select will have a tremendous impact on your auto insurance rates. However, this doesn’t mean you should be so focused on cheaper rates that you skip out on the coverage that you need.
For instance, don’t settle for minimum insurance coverage requirements when you require full car insurance coverage. Having inadequate auto insurance is a recipe for financial disaster.
Adding optional coverages may increase your premiums. Speak to your insurance provider about bundling options to help you save more.
Final thoughts
Even drivers with a perfect driving record may see an increase in their car insurance renewal price. That’s because car insurance rates are sometimes based on factors out of your control, such as high insurance claims in your area, changes in your insurance score, and uninsured drivers. If you’ve added a new vehicle or driver to your insurance policy, your car insurance may also increase at renewal time.
They say that knowledge is power. It doesn’t hurt to ask about the way these factors affect your insurance rate when you’re calling companies for auto insurance quotes.
