Why Your Car Insurance Rates Went Up This Year
What actually drives rate increases
Your car insurance rate went up because your insurer recalculated the risk of insuring you, your car, or both. This happens every time your policy renews — usually annually. The company looks at claims data from your area, your driving record, your age, the car itself, and how much you're driving. If any of those factors shifted, your rate shifts with it.
The most common reason is a claim or accident on your record, even a minor one. A single at-fault collision can raise rates by 20 to 40 percent depending on the state and insurer. A speeding ticket or other violation typically raises rates by 10 to 25 percent. But you don't have to be at fault — some insurers raise rates after any claim, including ones where you were hit by someone else.
The second reason is regional. If claims in your ZIP code went up — more accidents, more theft, more weather damage — your insurer raises rates across the board for that area. This happens even if you personally had no claims. You can't control this, but you can shop around, because different insurers weight regional risk differently.
Key Takeaways
- Claims and violations on your record are the fastest way rates go up, and they can stay on your record for three to five years depending on the state.
- Regional increases happen when claims rise in your area, and you can only respond by comparing quotes from multiple insurers.
- Your age, the car you drive, and how much you drive all factor into renewal rates, and some of these you can change.
- Bundling home and auto policies, raising your deductible, and removing unnecessary coverage can lower what you pay at renewal.
- Rates vary widely between insurers for the same driver and car, so shopping every one to three years is the most direct way to fight increases.
How long a claim or ticket stays on your record
A claim or accident typically stays on your driving record for three to five years, depending on your state. An at-fault collision usually counts for longer than a not-at-fault claim. A speeding ticket or other moving violation usually stays for three to five years as well, though some states keep it longer.
The insurer can see this history when you renew. Even if you switch companies, the new insurer will pull your record and see what happened. You cannot remove a legitimate claim or ticket early — you have to wait out the time period. Some states allow you to take a defensive driving course to reduce the impact of a ticket, but this doesn't erase it from your record.
If you had a claim three years ago and your rate is still high at renewal, it may be time to shop around. Newer insurers may weight older claims less heavily than your current company does.
Why your car's age and type matter at renewal
As your car ages, repair costs change, which changes how insurers price collision and comprehensive coverage. A newer car costs more to repair, so collision coverage is more expensive. An older car costs less to repair, so collision coverage is cheaper — but the car itself is worth less, so the coverage pays out less if it's totaled.
The type of car also affects rates. Sports cars, luxury cars, and vehicles with high theft rates cost more to insure. Sedans and minivans typically cost less. If you bought a different car since your last policy, your rate will reflect that at renewal. You can't change what car you own, but you can factor insurance cost into your next purchase decision.
Some insurers also track mileage now through apps or plug-in devices. If you're driving more than you were last year, your rate may go up. If you're driving less — working from home, for example — you might be able to lower your rate by switching to a low-mileage policy or telling your insurer your driving habits changed.
Regional and market-wide rate increases
Insurance companies raise rates across entire regions when claims go up in that area. This might be because there were more accidents, more severe weather, more car thefts, or more expensive medical claims. It has nothing to do with your personal driving. You'll see this as a rate increase even if you had zero claims and zero violations.
You cannot stop a regional increase from happening, but you can respond to it. Different insurers weight regional risk differently, so one company might raise rates 15 percent in your area while another raises them 5 percent. Shopping around every one to three years is the only way to find which insurer is pricing your region most favorably right now.
Some states publish rate increase data by insurer, so you can see which companies are raising rates fastest in your area. Your state insurance commissioner's office usually has this information on their website.
Steps to take when your rate goes up at renewal
First, review your renewal notice carefully. It should list what changed — a claim, a ticket, a rate increase for your area, or a change in your coverage. If you see something you don't recognize, call your insurer and ask. Sometimes errors happen in the data they pulled.
Second, get quotes from at least two other insurers before you renew. Use the same coverage limits and deductibles you currently have so the quotes are directly comparable. You can do this online in 10 to 15 minutes. Rates vary widely, and a company that's expensive for you now might be cheap next year.
Third, consider raising your deductible if you can afford to cover a larger out-of-pocket cost in a claim. Moving from a $500 deductible to a $1,000 deductible typically lowers your premium by 10 to 25 percent. You're trading a lower monthly payment for higher risk if you have an accident, so only do this if you have savings to cover it.
Fourth, review your coverage. If your car is older and paid off, you may not need collision or comprehensive coverage — you're only required to carry liability. Dropping these can lower your rate significantly. If you have an older car and a long commute, you might not need uninsured motorist coverage in every state. Ask your insurer what you can remove.
Bundling and discounts you might be missing
If you have homeowners or renters insurance, bundling it with your auto policy typically saves 15 to 25 percent on your auto rate. This is one of the largest discounts available. If you're not bundled, getting a quote from your home insurer's auto division is worth doing.
Other discounts vary by insurer but commonly include: paying your premium in full instead of monthly, having a clean driving record for a certain number of years, taking a defensive driving course, installing anti-theft devices, and having good credit. Some insurers offer usage-based programs where you get a discount for safe driving tracked through an app.
Ask your insurer specifically which discounts you're currently receiving and which ones you might be missing. You may already may have access to for something you haven't activated. At renewal, mention any life changes — you retired, you moved closer to work, you got married — because some insurers have discounts tied to these events.
When to switch insurers versus staying put
If your current insurer raised your rate by more than 10 to 15 percent and you have a clean record, shopping around is worth your time. The difference between insurers for the same driver and car can be hundreds of dollars per year. You have nothing to lose by getting quotes.
If you have multiple claims or violations on your record, you may face high rates everywhere, but some insurers specialize in higher-risk drivers and may be cheaper than your current company. It's still worth shopping.
If you switch, make sure your new policy starts before your old one ends so you have no gap in coverage. Gaps in coverage can raise your rates at future renewals, even if you switch back. Most insurers let you choose your start date when you buy a policy online.
Frequently Asked Questions
Can I get my rate lowered mid-policy if I think it's wrong?
You can call your insurer and ask them to review the rate, but they're unlikely to lower it before renewal unless they made an error. Your best option is to wait for renewal and shop around at that time. Some states allow you to request a rate review through the insurance commissioner's office if you believe the increase is unfair.
Will my rate go down after a few years with no claims?
It may, but not automatically. Some insurers offer loyalty discounts or accident-free discounts after a certain number of years. Ask your insurer at renewal whether you may have access to for any discounts based on your clean record. If they don't offer one, a competitor might, which is another reason to shop around every few years.
Does paying my premium monthly instead of annually cost more?
Yes. Paying monthly typically costs 5 to 10 percent more than paying the full premium upfront. If you can afford to pay annually, you'll save money. Some insurers also charge a monthly payment fee on top of the higher rate, so ask before you commit to monthly payments.
What if I had an accident that wasn't my fault — will my rate still go up?
It depends on your insurer. Some raise rates after any claim, even not-at-fault ones. Others don't. If your rate went up after a not-at-fault claim, ask your insurer whether they have a not-at-fault accident forgiveness program. If not, switching to an insurer that does offer it could lower your rate at renewal.
How often should I shop for car insurance?
Every one to three years is a good rule. Rates change, new discounts appear, and your situation changes. Even if you don't switch, getting quotes reminds you what you're actually paying compared to what's available. Many people find they can save money just by asking for a quote.