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What Affects Car Insurance Rates? Factors that Cause Higher Rates

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Have you opened your statement and noticed that you are suddenly paying more for your car insurance premiums? Or have you ever been surprised to see that your rates have gone down? Both scenarios can be a bit confusing if you’ve never encountered them before. If you’re wondering what causes car insurance to go up or down, here’s a helpful guide to car insurance rate changes:


What Affects Car Insurance Premiums?

Your insurance company uses many factors to calculate and adjust your rates. Some of these are within your control and others are not. Below, we’ll discuss what affects car insurance rates, starting with the factors you have some power over.


Car Insurance Rate Factors Within Your Control:

Your Car – If you drive an expensive car, it will probably cost more to insure because it costs more to repair. Similarly, if your car is a newer model that’s loaded with a lot of tech, your premiums will likely be higher. That’s because fixing a complex system such as a rearview camera or collision avoidance system requires a lot more time and effort than simply replacing a bumper.

Your Mileage – The more you drive, the higher your risk of an accident or traffic violation. That’s why people who use their vehicles as daily drivers and put a lot of miles on their cars often pay more than those who drive very little. If you want to bring down your rates, look into carpooling or riding a bike to work to cut down on mileage you put on your car.

Your Record – If you have a lot of points on your record from traffic convictions or have been at fault for accidents, you will pay more in insurance premiums. Luckily there are ways to bring your premiums back down, even if you have a spotty record right now. Wawanesa Insurance offers a Good Driver Discount for California drivers who keep a clean record with no more than 1 point within the last three years.

Your Location – If You live in a high-crime area with a lot of auto-theft claims, you will pay more for car insurance. While it might not be realistic to move, there may be other things you can do to bring down your rates. Speak to your insurance provider to see if they offer any discounts for installing a security system.

Your Experience – If you are inexperienced behind the wheel, you are more of an insurance risk. Talk to your insurance company to see if they offer any discounts for completing a driver training course. It could help bring down your premiums.


Car Insurance Rate Factors You Can’t Control:

Increase in Number of Accidents – In recent years, there has been a rise of drivers on the road. This, coupled with the use of smartphones while driving, has led to a significant increase in the amount of accidents on the road. This means that insurance companies are paying more to settle new claims. Under these circumstances, insurance companies have no choice but to increase premiums to ensure that their drivers are sufficiently covered.

Increase in the Cost of Claims – Medical costs are rising faster than the rate of inflation. The same holds true for car repair costs. Most new cars come equipped with high-tech sensors and camera systems and account for an increase in cost for car repairs in general. Both of these factors mean that claims simply cost more to settle than they did only a few years ago.


Each insurance company relies on a different set of standards and calculations to arrive at your car insurance rate. If you would like more information on what affects car insurance premiums contact us to see if there’s anything you can do to lower your rates. Get a free quote today to see if you should be paying less for your car insurance.


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The above content is for informational purposes only and is not a direct representation of coverages offered by Wawanesa or its policies. The information does not refer to any specific contract of insurance and does not modify any definitions, provisions, exclusions or limitations expressly stated in any contracts of insurance. All references within the above content are illustrative and may not apply to your situation. The terms and conditions of the actual insurance policy or policies involved in a claim are determinative as to whether an accident or other loss is covered. To understand the coverage under your current policy, please log into the account management platform to review your policy or contact an agent directly.