Why Is My Car Insurance So High?

Your auto insurance rates are based on a number of factors, including things such as your driving record and your residence. If you find your premiums have gone up recently, there could be various factors to blame. Fortunately, there are actions you could take to lower your insurance costs substantially.

What Determines How Much You Pay for Auto Insurance?

Several states require drivers to carry a certain minimum of liability insurance, but their automobile insurance choices have a lot flexibility. Spending averaged $1,633 in 2021, whereas predictions for 2022 stand at an average of $1,706. An average American pays approximately $136 annually to insurers, according to Insurify, an insurance cost comparison website.

But, of course, that's just an average, and the price you pay can be higher or lower, depending on many different factors, include: 

Your driving record: When you request a quote for automobile insurance, one of the factors your insurer will consider is your driving record, which may contain information about traffic tickets you've received or accidents you've experienced. If you have a clean license, you'll enjoy lower premiums. If you have a history of insurance claims or accidents, your premiums will be higher than normal.

Where you live: Your insurance premiums can vary widely from one state to another as well as locally. For example, if you live in an area with a high crime rate, your insurance company may charge you a higher premium because it assumes that you're more likely to file an insurance claim with regard to burglary or vandalism. According to an earlier study, Maine has the lowest full-coverage insurance rates, at $965 a year; Louisiana has the highest coverage rates, exceeding $2,720 a year.

How old you are: Less experienced drivers tend to pay more insurance rates because of their likelihood of being involved in a crash. If a young driver is listed on a parent's policy, it too may influence the premiums that the parent or guardian must pay.

Your gender: Women have fewer and less serious car crashes than men, so they typically pay less for car coverage.

Your credit score: The connection between higher creditworthiness and lower rates of automobile insurance may appear less obvious than other factors. It's because several automobile insurance companies use your credit score to determine how much to charge you for insurance coverage.

Your car: If you're driving an expensive sports car, your insurance rates will be significantly higher than if you were riding around in a regular car. That's because you will have to pay more to replace or repair the sports car compared to the sedan after an accident. Your car and safety equipment's safety and security record also figure into this classic insurance policy calculation. And according to the Insurance Information Institute, "Insurers not only look at how safe a vehicle is to drive and how well it protects occupants but also how much potential damage it can inflict on another car. If a certain vehicle model has a higher chance of inflicting damage in an accident, an insurer may charge more for liability insurance."

What Can You Do to Lower Your Car Insurance Rates

Drive carefully: Your premiums will likely decrease over time if you stay off the road and do not make any claims for it. Lots of insurance companies now use telematics to monitor drivers' speed, acceleration, braking, and so on and reward them with lower rates if they use safe driving behavior. If you are not uncomfortable with that, you may want to think about the option.

Raise your credit score: Given that your credit score is an enormous factor in establishing your insurance rates, anything you can do to boost it can pay dividends. Investopedia has information on improving your credit rating like this.

Take a class: Many car insurance providers offer a lower rate if you take an approved defensive driving course. You may also be required to attend one if you are involved in a DUI or another type of violation.

Bundle your insurance policies: You may be entitled to a price reduction if you buy your automobile, homeowners insurance, as well as other policies from the same company.

Shop around: The insurance business is extremely competitive, and businesses are keen to gather new customers. There are lots of websites on the web where you can enter your information and compare rates. If your insurance expenses have gone up recently, it could be well worth contacting your current company or agent to find out what happened. If your clientele wants to keep your business, they might provide you with suggestions for lowering your rates.