Why Did My Car Insurance Go Up?

If starting an argument at work or the dinner table is your main goal, money and politics are often the go-to topics for creating a fracas. Those and bringing up the time Uncle Walt insulted everyone by complaining about the Christmas turkey, of course.

Something else guaranteed to gets chins wagging? Car insurance – or the seemingly ever-increasing price of it, to be specific. It is not uncommon for drivers to bristle at the cost of vehicle insurance, especially since it is a product one doesn’t think about until calamity strikes. In fact, if one has a great driving record and a host of good luck, it is entirely possible a person could pay for insurance policies their entire lives and never make a claim. This makes car insurance one of the few things in life people buy but hope to never use.

AutoGuide.com thanks Toyota Insurance for sponsoring this insurance series

The cost of coverage has more variables than a deep space NASA science experiment but can be largely boiled down to one’s driving history, rating characteristics (like age and marital status) and behaviors (credit), and the type of car they own. Other factors play a role, of course, such as the location in which you reside and the number of items covered by the insurance policy.

Let’s tackle these points individually. One’s own driving habits are arguably the easiest to control (and alter, if necessary), making it a good starting block for this conversation. Speeding tickets are generally a one-way street to higher insurance premiums, since getting caught driving in an illegal manner can make a person riskier in the eyes of an insurance company, which will translate to an expensive premium. The more egregious (or frequent) a vehicular transgression, the higher costs will climb.

Having a raft of past claims can also cause insurance prices to go up. If a company has paid out tens of thousands to repair vehicles or replace parts (like windshields), it may very well place you in a higher risk category. Being a human magnet for mayhem can end up being expensive. Jokes aside, it is a good idea to ask the pros at a place like Toyota Insurance  if a product called ‘accident forgiveness’ can be added to your policy. This provision allows for certain crashes to be wiped from one’s insurance record as if it never happened. Qualifiers are many, and it may not be advantageous for everyone due to cost, but it can be an absolute game changer when that lumpy Econoline van pops up in the intersection out of nowhere.

The type of car you drive also plays a huge role in determining the cost of insurance. Every single make and model on the road falls into a risk category, with machines like sports cars naturally being deemed riskier to insure than a compact economy car. Part of that calculation is predicated on decades of data, while other parts of it are simply common sense. After all, there’s more chance a Dodge Challenger SRT Demon 170 with over a thousand horsepower could (in the wrong hands and wrong situation) get into more trouble than a Mitsubishi Mirage with 78 ponies under the hood. Having a spotless driving record can mitigate, but not erase, any delta between those two extreme examples.

Also, there is something to be said for the fact a Demon 170 is far more likely to get stolen than a little Mirage. Desirability has much to do with that risk, though some seemingly pedestrian vehicles are slapped with high insurance premiums thanks to their popularity on the black market or ease of being driven away without the key. Smart shoppers will check this variable before buying a car, lest unexpected costs arise beyond the moment of purchase.

One’s living address frequently affects insurance costs, as well. Some cities are notorious for traffic mayhem, bad drivers, and vehicle thefts, leading insurance companies to place the area in a different class of risk than rural areas in which there is low population density. While a case can be made that it’s unfair we should all have to pay inflated premiums thanks to a few bad actors in our area, the truth remains that insurance is largely a game of averages.

It can be an unpopular subject, especially if your credit score has taken a few dings, but most insurance companies rate customers using credit scores, because their math has proven a direct relationship between credit score and future losses. No matter how much it pains you to write that insurance check every month, it is vitally important that you keep your auto coverage active, not only for the societal reasons, but customers who have spotty payment histories also tend to have more insurance claims, and are consequently charged more. This is another great reason for working with the seasoned pros at Toyota Insurance. They can put you on the path from the high-priced high-risk insurers to the low-priced low-risk ones.

All of this being said, even if you are a middle-aged perfect driver with an 800 credit score, your insurance rates are on the rise. Why? Because insurance companies set their prices based upon how often they have to pay to fix “things” and people, and how much they have to pay to fix them. Customers are driving more since the pandemic, which means that claims happen more often. Inflation affects the cost of everything from car parts to medical supplies, and cars today are as much computers and sensors as they are vessels of transportation, which means that it requires more time and money to fix them. All of this adds cost and complexity to the claims process.

These days, it pays more than ever to shop around for your coverage. The friendly sales professionals at Toyota Insurance are ready to help!