Drivers who have auto insurance coverage that they are happy with may be surprised that their rates are not necessarily locked in for life. In fact, there are a lot of things motorists could end up doing that skyrocket their premiums.
Policyholders who want to make sure their insurance coverage doesn’t become much more expensive should be aware that doing any of these four things could result in higher rates.
1. Obtain a ticket
Auto insurance companies assess the cost of premiums based on how risky they feel to be a driver. If an insurer believes a motorist is more likely to be in an accident, premiums will be higher.
If a driver receives a ticket for a moving offense, such as speeding or red light, it shows the insurance company that the motorist has a propensity to engage in high-risk behaviors while driving.
Whatever offense the driver committed that led to the ticket could also increase the risk of a collision. Insurers will take this into account and increase the cost of coverage in the future.
2. Cause a traffic accident
If a driver is responsible for a traffic accident, this is also a major red flag for insurers. Not only will the company have to pay for the accident that occurred, but they will also have reason to suspect that the motorist who caused the accident is not driving safely and is at greater risk of causing another collision in the future. the future.
Unfortunately, the more serious the accident and the more damage it causes, the higher the auto insurance premiums are likely to be in the future. Some insurers also offer discounts on safe driving that could be affected by a traffic accident, which can cause premiums to skyrocket even more.
In some cases, insurers may offer an accident discount, so they may not increase premiums after certain collisions. However, drivers are generally limited to making amends for an accident. And switching to another insurer could be more expensive after a collision, even with an accident discount in place under existing coverage, so drivers could find themselves stuck with their current insurer.
3. Move to a more dangerous neighborhood
Moving to an area where more accidents occur can lead to a higher risk of collision and thus increase car insurance premiums. Plus, insurers don’t just cover collisions. If drivers buy full coverage, the insurance company will also pay if a vehicle is stolen or damaged by vandals. As a result, a move to a more dangerous neighborhood where other issues could arise will also lead to increased insurance premiums.
4. Buy a more expensive car
More expensive cars can cost more to repair or replace in a crash. There may also be an increased risk of the vehicle being stolen. And, of course, if a more expensive car is taken, the insurer will have to pay the policyholder more since the vehicle has a higher market value.
For this reason, if a driver buys a car that costs more than the one they previously owned, this is also likely to lead to increased insurance premiums.
Motorists should aim to avoid accidents and tickets and should be aware of how a move or the purchase of a new vehicle could affect their premiums so that they can anticipate the impact on their budget.