Each year during the renewal of your auto insurance, you notice an increase in your insurance costs. This happens even if you haven’t done anything that may lead to an increase in your premium rates. You may wonder whether this increase in your auto insurance rates every year is normal.
In this blog, we will discuss the reasons for the yearly increase in auto insurance and how much will your car insurance cost you in the coming year, according to the projected trends.
Why Do Auto Insurance Rates Increase?
There are two factors that you may have no control over when it comes to the increase in auto insurance costs are:
- Insurance providers charge higher rates when their annual claims pay-out exceeds the income that they receive through premiums.
- Increased inflation rates
Main Factors That Lead to Increase in Insurance Rates
The factors that you cause resulting in your auto insurance rates rising include:
- Filing a claim
If you file a claim for loss or damage, you may expect an increase.
- Increasing types and limits of coverage
Having the basic liability coverage will cost you less, and you may not be too affected by the increasing costs, but for better protection, if you buy more coverages with higher coverage limits, you may be impacted more.
- Adding or replacing a new vehicle or a driver in the policy
If your new car needs higher repair costs or has fewer safety devices, you may pay more. Also, if you add a new driver, say your teenager, the rates may increase
- A traffic violation
Traffic violations such as over-speeding or DUI may adversely affect your insurance rates.
Other Factors That Impact Auto Insurance Costs
Besides the factors mentioned above, other are other factors too that may increase your insurance rates, such as:
- Your driving record
If your record reflects multiple accidents where you are the at-fault driver or other misdemeanors, be prepared to pay more.
- Credit score
Lower credit scores mean higher premium rates.
- Average mileage
With higher mileage and more frequency of usage, you may pay a higher rate.
- Your location
For areas with higher theft and vandalism rates, your cost may be higher.
- Your deductible
The lower your fixed deductible amount, the higher will be your monthly premiums.
Expected Auto Insurance Cost for The Upcoming Year
This year, too, you can expect your auto insurance to increase, as with each year but in 2023, car insurance rates are expected to rise by a whopping 8.4% across the country, with the average cost of the annual full car insurance at $ 1,780. However, the increase in your auto insurance rates may depend on the state in which you live, as the rates may vary from one state to another.
For lower auto insurance rates, you must work toward having an improved driving and insurance claim record. Also, ask your insurance provider whether you are eligible for any discounts.
Get Affordable Auto Insurance with Reardon Insurance
If you are searching for affordable auto insurance coverage, contact our team today. At Reardon Agency Insurance, we understand your concerns about the increasing auto insurance rates and help you get the best coverage at the most affordable rates.
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