5 Reasons Why Car Insurance Cost Changes

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Car insurance companies are savvy in maximizing their profits with customers.  They understand the best times to increase your premiums and how they can get away with not changing your premiums. Wewill take a close look at the best ways for you to transfer car insurance company’s profits to your pockets.  What are the areas to look at to make sure you are not paying too much for car insurance?


Cost To Insurers Increases

One of the areas your premiums can increase is the cost of doing business increases for your car insurance company.  This could be for numerous reasons, such as inflation raising the cost of doing business or an increase in claims.  If a car insurance companies cost is going higher it is easy for them to maintain their profitability by increasing your premiums.  If your premiums are increasing with no changes to your driving record you should contact your insurance company and ask for details on the increase.  It is also a good idea to check in with other companies to see if they can provide better pricing.

Cost To Insurers Decreases


Technology for car insurance companies decreases the cost of doing business by lowering overhead and providing more accurate data to measure risk.   By being able to market their services on the internet and provide support on the phone, car insurance companies can decrease their overhead by reducing the need to have physical offices.  Another way technology is reducing cost is by installing a telematic device in our cars to track mileage and driving habits such as braking and speed.  This additional data helps actuaries better measure your risk and assign how much you should be charged for your car insurance.  The important question is if your cost of being insured drops, are your savings being passed along?

Increase in Violations

Common violations are minor violations for speeding or running a stop sign.  These violations will typically stay on your record for 3 years in most states.  Major violations relate to offenses such as DUI and these will often stay on your record for 10 years.  It is a good idea to verify how your state accounts for your violations and the length they remain on your record.  Understanding these details will help you understand the additional risk you hold in the eyes of insurance companies.  Traffic violations or at fault accidents are a leading reason for your premiums to go up. It is possible your existing insurance company will overcharge you for a violation.  If you had recent violations it also makes sense to get multiple quotes to ensure you are not being excessively charged.

Value of Car Changes

If your car is getting older it only makes sense the risk of damages should drop as well.  A new car will drop as much as 50% in the first 3 years of ownership.  If you have been with the same car insurance company for awhile, have seen your premiums drop as your car has gotten older?  Would it be helpful to lower your monthly car insurance expenses?   This is one the main reasons why most of the car insurance company’s advertisements claim you could be saving 15% on car insurance if you change providers.  Check in with your existing car insurance company to see if you can lower your premium.


Monthly Mileage Changes

Have you seen any changes in the mileage you drive for any of the cars in your family since you signed up with your car insurance company?  Maybe you have changed jobs or are working from home more frequently?  Possibly, you are now taking public transportation or car pooling?  If there has been a change in your mileage where you are driving less you should be seeing your car insurance premiums drop.  It is likely your car insurance company will not be calling to ask if your mileage has changed.

The above are a few common reasons on why you may be paying too much for car insurance.  It is always a good idea to shop around for car insurance to keep your current car insurance company honest.  There are many web sites available on the internet where you can spend a few minutes and receive multiple free quotes back from several car insurance companies.


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