Most people don’t understand why their car insurance premiums go up. Some think that it’ just how insurance works. Well, more factors will cause your car insurance premium to increase.
Here are some of the common factors that affect car insurance cost.
Distracted and irresponsible drivers
No, I’m not talking about you but bad drivers in general. Here’s how it works: bad drivers cause insurance providers a lot of money. And those expenses are passed on to policyholders in increments that we usually see as premium cost increase.
Repair costs for vehicles are also increasing. The more repair costs the insurance providers pay for, the higher the expense they’ll pass on to their policyholders. This factor is something you won’t be able to control.
Low credit score
Remember that your credit score affects the rates that insurance companies will give you when you apply. They look at the credit score to determine the calculation of your premium. Even if you are renewing an existing policy, if your credit scores are low, your insurance rates will increase upon renewal.
Location is also another factor that affects the car insurance premium. When you move to a different state or even a different county, your insurance premium will change. So before moving make sure to talk to your insurance agent to find out how much the change will be.
Increase in medical costs
The number of people driving, acquiring vehicles, and getting into accidents also affects car insurance premiums. More people are getting into vehicular accidents. Therefore insurance companies are paying more and more medical bills. Again, these types of cost are later on passed on to policyholders in the form of premium increase.
There are many more factors that affect the car insurance premium. The premium will change no matter how diligent one is when it comes to driving and car insurance. We have to accept the changes and make the necessary financial adjustments.