Factors That Cause Changes In Auto Insurance Rates
Posted on: 25 November 2020
When certain things change, the changes can affect your auto insurance rates. If you receive a notice that states your policy costs are increasing or decreasing, it is probably due to some type of change. Here are some of the primary factors that can lead to changes in auto insurance rates.
Anytime you add, remove, or trade-in a vehicle, your insurance costs will change. Insurance agencies use formulas to determine the rates they charge, and these formulas factor in the vehicles you have. Therefore, if you change the vehicles on your plan, you can expect to see rate changes. The rates might increase or decrease depending on the changes you make to your policy.
If you do not change your vehicles, you might see rate changes if you modify your coverage on the cars. For example, if you switch from a full-coverage policy on one vehicle to liability-only coverage, you will likely see a decrease in your auto insurance premiums. It costs less to insure a car with liability-only compared to full-coverage.
Changes in Your Driving Record
The next thing that can cause rate changes on your policy is changes to your driving record. If you get a traffic violation, your insurance company will be notified. As a result, they might increase your rates. Your rates can also go up if you cause an accident that leads to filing a claim. Any positive changes to your driving record might result in cost decreases. However, any negative changes might result in rate increases.
Changes in Other Drivers
Additionally, if you change drivers on your plan, you might also see changes in your premiums. For example, if you add a teen driver to your plan, you will likely see a significant increase in your costs. Teens are seen as risky drivers, and insurance companies charge higher rates to insure them.
Changes in Your Driving Habits
Finally, certain changes to your driving habits can also lead to premium changes. For example, if you stop driving consistently and only drive a few miles a week, your insurance company might reward you with a low-mileage discount. On the other hand, if you start driving more, they might increase your rates to compensate.
If you want to decrease your rates, you can do so by making the right changes. To learn more about your auto insurance rates and ways to save money, talk to an auto insurance agent today. An insurance service can provide additional information.Share