Updated February 23, 2021
“Why is my car insurance so high? Why does my car insurance keep going up?” Millions of people have asked themselves these questions as they look over their monthly premium payments or shop for affordable car insurance. These are fair questions to ask — especially since more and more people are looking for low-cost car insurance coverage than ever before.
There are plenty of factors that can make car insurance expensive. The most obvious factors are your driving record and your age — and though we’ll cover these below, others could be raising your rate.
More importantly, the list below makes it clear which factors are out of your control — like your age and circumstances — and which ones you may be able to adjust.
Why Is My Car Insurance So High? The Reasons:
Here are some reasons why your car insurance is more costly than you’d like, as well as what you can do to lower the cost of your premium.
1. Your Age
Young drivers are at significantly higher risk for auto accidents than older adults, according to the Center for Disease Control and Prevention (CDC). For this reason, young driver insurance is pricey. So if you’re asking, “why is my car insurance so high,” this might be a big part of the answer.
There are several reasons younger drivers are at higher risk. The first and most obvious reason is a lack of experience on the road and lack of overall maturity. This can lead to drivers taking risks without understanding the consequences, not having a good instinct for how traffic moves, and simply lacking the ability to make the effective split-second decisions needed to avoid accidents. For these reasons, many insurance companies feel that younger motorists can pose a higher chance of being involved in a collision.
On top of that, teen drivers account for $11.8 billion of the total costs of motor vehicle injuries, according to the CDC. That is quite a number for insurers to take in — and it’s no surprise that insurance rates tend to be higher for drivers in this age bracket. Plus, drivers aged 16 to 19 years old are three times as likely to be in a fatal crash than a driver who is 20 years old or older.
Unfortunately, until these statistics change, there’s nothing you can do to lower your insurance rate as a driver under 25. However, there are certain things you can do to avoid it going higher, the most important of which is keeping a clean driving record and avoiding accidents.
This being said, some insurance providers may provide a small discount if the young driver is attached to their parent’s policy. If the parent has been a client with the insurance company for a long amount of time, they are even more likely to extend this discount.
2. Your Car’s Garaging Address
This is a strange answer to “Why is my car insurance so high?”
Yes, the location you park your vehicle can affect your car insurance rates, according to the Insurance Information Institute. And when you look at the reasons, it’s not so surprising after all. A car in the calm, stable climate of northern California is far less likely to be damaged by hail than one in Kansas. If you park your car at a rural address, it’s far less likely to be broken into than in a city with a high crime rate.
So it stands that weather patterns, the local crime rate, and the number of claims made within the vicinity of your car’s garaging address are all factored into the price of your premium. If you move into a heavily populated city instead of a spread-out suburban area, you’ll likely see your rates go up as a result.
Likewise, suppose you park in a place with a more unpredictable climate. In that case, you could experience a rate increase due to the risks of a hurricane, snowstorm, tornado, or other damaging weather phenomena. You can have some degree of control over this by talking with your insurance agent if you are moving to a new location. Be sure to ask how much your move will affect your overall premium cost so you can shop and budget accordingly.
3. Your Vehicle and How You Use It
The type of vehicle you drive and how often you use it have an enormous effect on your auto insurance premium cost.
In general, the logic behind this fact is this: The more expensive and desirable the automobile, the higher the risk of it getting stolen and the higher the cost for repairs. There is also data-driven evidence showing cars with higher horsepower racking up more speeding tickets. However, it’s not just flashy, high-end sports cars taking home the tickets. Many of the most ticketed automobiles are moderately priced sedans and coupes.
The other factor is how many miles you put on your car. If you drive a long commute to work, you are spending more time on the road and thus have a higher chance of getting into a collision — at least compared with someone driving the same car only for weekend excursions in the countryside. No matter how clean your car history is, your rates will be higher the more miles you put onto a vehicle.
So if you’re wondering, “why is my car insurance so high,” look at what you drive and how much you drive it. If you need a newer car but don’t want your insurance premium to soar, consider getting an efficient, modest vehicle that boasts a good safety rating. That will encourage insurance providers to offer you a more reasonable rate. You can also consider finding ways to put fewer miles on your car, such as public transit and carpooling.
4. Your Marital Status
“Why is my auto insurance so high simply because I’m single?”
It’s a fair question with a seemingly unfair answer. However, the numbers don’t lie. Statistically speaking, married people get into fewer collisions and have fewer traffic violations than single people, according to a large cohort study. With that in mind, insurance companies see married couples as a safer bet than unmarried people.
Though you certainly won’t base a marriage around better auto insurance rates, you can look forward to it as an extra perk if you do get married.
5. Your Credit Score
If your credit is bad, insurers may only offer you high-risk auto insurance rates. Regardless of your driving record, poor credit automatically makes you seem like a higher risk for insurance companies. Once you’ve improved your credit score, talk to your insurance provider to see if they would be willing to cover you at a lower premium.
If you live in California, Hawaii, Massachusetts, or Michigan, laws prohibit insurance companies from basing your premiums on credit score.
6. You’ve Canceled a Policy Before
Insurance companies tend to reward long-term customers. Not fulfilling a current insurance term and canceling it prematurely not only hurts your relationship with your insurer but other insurance providers, too. Regardless of why, when another company sees that you have a canceled policy in your past, they will be hesitant to cover you and likely require a higher cost to cover you. Your best bet is to discuss the reasons why you previously canceled a policy with an insurance agent to see if they are willing to offer you a lower premium cost.
7. You Haven’t Bundled Your Policies
Most insurance companies are willing to offer lower car insurance premiums if you are willing to do other business with them. See if you can get a discount if you bundle your car insurance along with a homeowners, renters, health, or life insurance policy. This can not only lower your auto insurance rate, but the cost of other coverage could go down overall since you have bundled all of your policies together.
It is also helpful to have a company you trust in charge of all of your insurance needs. The insurer will understand the value and trust you are putting in them and is more likely to work with you on special needs.
8. Low Deductibles
It’s basic math: The more you spend out of your pocket before your insurance kicks in, the lower your overall premium will be.
Having a low deductible is helpful if you are in a collision since you don’t need to pay a lot before your insurance coverage activates. However, you’ll be paying much higher premiums overall since your deductible is so low. If you are a safe driver or don’t drive often, you could likely get away with adjusting to a higher deductible and take a risk on yourself, which would put your premiums at a lower overall cost.
This is a cost that’s well within your control, but you need to choose wisely. If you have an emergency fund stored up that could cover your deductible in the event of an accident, you can likely feel safe increasing your deductible even if you drive often. However, if an accident would put you in financial peril, you may need to stick with your plan.
9. You’ve Made Claims That Resulted in Big Payouts
For some insurance companies, seeing a large payout for an accident or theft encourages them to raise your premium, regardless of whether it was your fault. Your best bet to avoid a much larger premium payment in the future is only to claim what was damaged or stolen without embellishment. Asking for more than you need can often cost you more in the long run.
Also, if you’re involved in an accident, and it wasn’t your fault, make sure that your record has it listed as “no-fault” to avoid unnecessary premium increases.
And, of course, you can avoid many big-claim situations by simply keeping your car in excellent working order. Check out this article on five essential tire care tips to avoid blowouts, rear-ending accidents, and other events that can cause you harm and raise your premiums.
10. You Have a Poor Driving Record
Car insurance for people with accidents, violations, or other bad marks on their driving record can make insurance companies view them as high-risk drivers. Folks with an abysmal record will have to get an SR-22 to legally drive, which will have a sizable impact on insurance rates in the future.
There are high-risk auto insurance companies like Freeway Insurance that specialize in helping drivers obtain low SR-22 insurance costs. However, many other companies charge a higher premium based on your past if you were previously in an accident and were at fault if you have committed too many traffic violations or were given a DUI.
If you improve your driving record over time, you could convince insurance providers that you will not repeat your past mistakes, leading to lower-cost premiums in the future. All it takes is time. For this reason, correcting a poor driving record is in your control over the long term, but you will have to work and wait to get there.
Want to Lower Your Insurance? Switch to Freeway
If you’re one of the people wondering, “How much is my car insurance?!” you’re not insured by Freeway.
Freeway offers the lowest rates, even for drivers who have a bad driving record. Why pay more than you need to for auto insurance? Get cheap car insurance online from Freeway Insurance quickly and easily and find out how much you can save. Or, give us a call at (800) 777-5620, and our friendly, experienced agents will help you find the best car insurance at the lowest price.