Why Did My Car Insurance Go up Without an Accident?

Reasons Why Your Car Insurance Can Increase

Auto insurance companies calculate your rate based on various considerations, from your age and gender to the type of coverage you choose and your deductible amount. Here are several factors which could affect your car insurance rates.

Driving Record Violation

Your driving record is one of the biggest factors your auto insurance company considers when setting your rates. Even if your record is accident-free, your insurer can raise your premiums for other violations, including speeding, reckless driving or, worse, driving under the influence (DUI). Generally, moving violations stay on your driving record for three to five years, depending on your state, which means your rates could be higher until they fall off your record.

Your ZIP Code

Insurers take your ZIP code—and the risk data for that area—into consideration when calculating your premiums. If insurance claims rise in your area, your carrier could raise rates to cover their increased costs. Similarly, your premiums could be higher if you move to an area with higher traffic, crime and accident rates.

Adding a Driver

Have you recently added a teen, significant other or another driver to your policy? If so, this could explain the increase in your car insurance rate. Insurers take into account the driver's claim history, relationship to the policyholder and driving record. Statistically, teens and new drivers have higher accident rates, which may impact your premiums more significantly than adding a more experienced driver.

Higher Repair Costs

Inflation impacts prices across most sectors of the economy, including car insurance. Car prices are going up, as are the costs to repair them. Consequently, your auto insurers must raise policy premiums to keep up with rising expenses and make sure they can cover future claims.

According to the October 2024 consumer price index report, motor vehicle maintenance and repair costs have risen 5.8% over the past year. The same report shows auto insurance premiums have spiked 14% during the same period, though not solely due to more costly repairs.

Filing a Claim

Despite driving accident-free, your insurance could go up if you've filed a claim in the past few years. Even comprehensive insurance claims, such as those for a broken windshield, weather damage or a collision with an animal could place you in a higher risk category and result in a higher rate. You might pay out of pocket for minor damage, such as a dent or scratch, to avoid making unnecessary claims that may drive up your rate.

Losing a Discount

Auto insurance providers typically offer many discounts that can reduce your policy premiums. These include savings for going paperless, bundling multiple policies or even becoming a new customer. If you've recently lost a discount—such as for bundling or maintaining a clean driving record—your premiums could rise. If you're not sure why your car insurance premium increased, reviewing your policy and checking for changes to your discounts is a good place to start.

Changing Coverage

While you're reviewing your policy discounts, take a look at your coverage options too, especially if you've made any recent changes. If you've recently lowered your deductible, it could explain why your rate went up, as lower deductibles typically mean higher premiums. Adding extra coverage, like comprehensive insurance or roadside assistance, or increasing your coverage limits may also increase your costs.

Credit Score Drop

A recent drop in your credit score could also lead to a higher car insurance bill. In states where it's allowed, insurance companies often use credit-based insurance scores when assessing risk and calculating your premiums. A missed payment, higher debt balance or new credit accounts can negatively affect your credit score and, in turn, lead to a higher bill.

Why Did My Car Insurance Go up for No Reason?

If your car insurance rates are higher for a reason you didn't cause, it's likely out of your control. Your insurer could have raised rates across the board or specifically in your area for other reasons.

An Insurify study reveals that full coverage auto insurance rates rose by an astonishing 39% over 2023 and the first half of 2024 combined. The report finds insurers are raising rates to offset losses caused by rising car and repair costs, severe weather catastrophes and new laws that shift more financial responsibility onto insurance companies.

Insurance companies raise rates for a wide variety of reasons, not just because you cause an accident or get a ticket. Industry-wide adjustments, increased claims in your region, higher claim costs and other factors you can't control can still affect the amount you'll pay for auto insurance.

Learn more >> Can Your Car Insurance Rate Change During the Policy Term?

How to Reduce Your Car Insurance Costs

Auto insurance rates vary by insurer, and premiums can go up even if you're not in an accident. Fortunately, there are several ways to reduce your auto insurance premiums, such as:

• Shopping for new insurance: The Insurance Information Institute (III) recommends shopping and comparing policies from three or more auto insurers. Compare coverage types, limits and deductibles so you're comparing apples to apples. Experian's auto insurance tool can help you save time by displaying several policy quotes side by side.
• Taking a defensive driving course: Many auto insurers offer lower premium rates if you complete an approved defensive driving course. These classes usually last from four to eight hours depending on your state's requirements. Upon completion, you should receive a certificate you can give to your insurer for a discount. Confirm with your agent beforehand which courses are eligible and how much you could save.
• Bundling policies: You may save up to 20% to 25% on premiums by bundling two or more insurance policies with the same provider, though some limit these discounts to new customers. It's a good idea to check with your insurer if the discount applies to existing policyholders or only to new customers.
• Dropping or reducing coverage: It's wise to review your car insurance needs every year to make sure you're not over-insured and spending more than necessary on your policy. For example, III suggests carrying full coverage on an older vehicle may not be worth it if the car's value is less than 10 times what you pay in yearly premiums. By dropping this type of insurance, you might save over $1,000 per year, according to a Insurance.com study.
• Raising your deductible: Calling your insurer to request a higher deductible is one of the simplest ways to reduce your premiums. Remember, your deductible is the amount you must pay on a claim—typically from $0 to $2,500—before your insurance policy kicks in. Generally, policies with higher deductibles have lower premiums and vice-versa. When choosing a deductible, make sure you have enough funds set aside to cover the deductible out-of-pocket if you ever need to file a claim.
• Maintaining good credit: Depending on your state, your credit score may be a factor when the insurance company is setting your premiums. As mentioned, insurers may use a different credit-based insurance score than a consumer credit score, but the score still offers a glimpse of your financial health. You may be able to lower your insurance rates by improving your credit with consistent on-time payments, paying down debt and reducing your credit applications.

Learn more >> Car Insurance Add-Ons That Can Save You Money

Shop and Compare Auto Insurance Rates Regularly

Regularly reviewing your car insurance coverage may help you spot areas where you can reduce coverage to save money. Getting quotes from several insurance companies can also show you how much you might save by going with another provider. Experian's car insurance comparison tool offers a fast and easy way to check rates from up to 40 car insurance companies and could lead to an average annual savings of over $800 on car insurance.