What Can Increase Your Car Insurance Premiums?
Drivers make monthly payments for car insurance, known as their premium. You pay this every month, even if you never have an accident and never use your insurance. Having lower premiums lowers the total cost of driving, so it’s important to know what things might increase your premiums.
Accidents Increase Car Insurance Premiums
The biggest, most obvious factor that increases car insurance premiums is the number of accidents you’ve had. Premiums may be increased for five years after the accident occurs, which can cost quite a bit of money. Light “fender-benders” may increase your insurance premium, even if there was little damage and no one was hurt.
Use and Location
If you increase the number of miles you drive every year, that could increase car insurance premiums. Insurance companies figure that the more you drive, the more likely you are to get into an accident. Moving to a more populated area or to an area with a higher crime rate can also increase your premiums.
Credit History Impacts Insurance Premiums
Your credit history does impact your car insurance premium, even though it may not be directly related to your abilities as a driver. Insurance companies look at credit history to gauge your level of responsibility. If you’ve been late on or missed payment, companies will view you as a riskier prospect and will likely increase premiums.
Type of Car – Both New and Old
Newer and more expensive cars have higher insurance premiums. But somewhat counterintuitively, older cars also have higher premiums. Insurance companies look at the costs associated with repairing a car after an accident. If it’s difficult to find parts for an older car then repair expenses will be higher, so they’ll likely require higher premiums to offset that extra cost. Additionally, if an older car is a “classic,” it’s more likely to be stolen, which also results in higher premiums.
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