7 Hidden Factors That Cause Auto Insurance Rates to Fluctuate

Though car insurance is a necessary expense, it’s one of those things you aren’t really grateful for until you need it. Premiums can easily eat up a significant amount of your budget, especially since rates fluctuate every year. However, fluctuating rates aren’t the only thing that affect your premium. In fact, your premium may change more frequently than you think, so getting the best rate requires staying vigilant and comparing quotes often.

How often? At {brand}, we recommend comparing quotes once every six months. This might seem way too frequent, but premiums change almost constantly. Don’t believe us? Here are 7 things that may change your auto insurance rate.

1. Old violations fell off your driving record.

It’s no secret that your rate is partly determined by your driving history. This doesn’t just include accidents, though. A traffic violation will stay on your record for a number of years before falling off. For example, depending on where you live, a speeding ticket may stay on your record (and drive up your rates) for anywhere from 1 to 5 years. When it falls off, your premium dips, too.

2. You’ve gone through a significant life event.

Have you recently added a new driver to your policy? Gotten married? Moved to a new home? These are all things that can affect your rate. For example, teen drivers typically come with higher premiums, but getting married usually means your rates decrease. If you moved to a zip code with a lower rate of vehicle-related incidents, you might score an even bigger decrease.

3. Your credit score went up.

If you’ve ever applied for a credit card or loan, you know how important your credit score is. Just about every financial institution uses your credit score to determine whether you are a trustworthy customer. Insurance companies do this too (unless you live in California, Hawaii, or Massachusetts, where it’s illegal). It’s unclear exactly which elements of your credit score affect your rate the most, but better credit usually means better rates.

4. You don’t have gaps in coverage.

Insurance premiums tend to be most expensive for brand new drivers and drivers who have let coverage lapse for a long time. Luckily, once you’ve had coverage for six months, insurance companies consider you less of a risk and your rates go down.

5. The value of your vehicle depreciated.

Unless you’re driving an ultra-rare classic vehicle, your car starts losing value as soon as you drive off the dealership lot. When your car’s value depreciates, your insurance company pays less to repair or replace it. This is another thing that can cause your premium to drop.

6. New insurers are offering better rates.

If you’ve had insurance through the same company for a long time, you may not notice that new insurance companies crop up frequently. However, brand new companies may have better rates than competitors as a way to draw customers. Additionally, you might get a better rate by switching to a company that is new to you for the same reason.

7. State requirements changed.

Every now and then, new laws come along and change the requirements for insurance coverage options. If insurance laws have changed in your state, you may need more or less coverage on your policy.

There are so many factors that influence your rate that it would be impossible to list them all in one blog post. However, these general trends can give you a better idea of when your rate may fluctuate, which is why we recommend shopping for insurance every six months. At the very least, when your rate increases you should start looking. Fortunately, at {brand} we make that easy.