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Why is Car Insurance so Expensive?

Why is My Car Insurance so Expensive

Car insurance cost is dependent on the auto insurance policyholder more so than anything else. There are a number of reasons why your auto insurance rates might be high. The most apparent ones, as we’ll see later, are your driving record and age, but there are other things that can contribute to your car insurance rate increase and make it expensive.

This post helps identify those elements that are beyond your control — such as age — as well as those over which you have some degree of control.

Why is Car Insurance so Expensive? Factors Affecting Auto Insurance Premium Rates


Younger drivers cost more to insure because they are generally new to the road with no experience beyond driver’s education. Furthermore, according to the CDC, one in four automobile accidents involves a juvenile driver. The CDC also found that teens are responsible for $11.8 billion of vehicle repair costs throughout the country.

It’s no surprise that auto insurance rates are higher among those who drive during this age group; it’s a lot of money for car insurance companies to shoulder. You will not be able to lower your auto insurance premium as a young driver. But, there are a few things you may do to keep your auto insurance rate from increasing and getting even more expensive.

The most important thing is to maintain a clean driving record and avoid accidents. A budgeted way that most parents of young drivers insure their kids is by adding them to their auto insurance policy. It’s much cheaper than giving them a car insurance policy of their own.

Address And Garage Location

Firstly, your address and zip code matters because it identifies where you live and what the local climate is like. This includes whether it’s a rural community or a location in a big city.

Larger, more populated areas tend to run higher auto insurance premiums due to traffic. Towns in the countryside tend to have lower car insurance rates. Your garage or where you keep your car also plays a role in making your car insurance premiums less or more expensive if it’s vulnerable to weather. Areas that experience such conditions as tornados, hurricanes, and blizzards are sure to see higher car insurance premiums.

Car And Its Primary Use

Take a moment and think about your car. Its make, model, and engine capabilities should all be taken into account because the car insurance company will be looking at all those factors when they determine your auto insurance premium.

For example, high-end sportscars with higher speeds are assessed as regular risks of speeding violations. This can be the case for any car in general, but it’s more likely a car built for speed will have more violations or citations. Auto insurance premiums are also higher because if the car were to be damaged, it would cost a lot to fix due to its exclusive and expensive parts.

How you use your car will also be taken into account by insurers when setting your car insurance premiums. This includes everyday commutes to work or using your car for work purposes itself. That may require commercial auto insurance coverage. But you’ll find that both commercial and personal auto insurance policies look at the mileage you regularly put into your car. This shows insurers how much you are on the road and thus your total accident risk.

It’s another general rule of thumb in the auto insurance world -drivers that don’t drive a lot pay less for their car insurance.

Marital Status

According to a large cohort study, married people have fewer collisions and traffic accidents, and fewer traffic citations than single individuals. With that in mind, car insurance companies regard married couples as a safer bet than those who are single so their car insurance premiums are less expensive.

Credit Score

If your credit is poor, you may be charged high auto insurance premiums. Car insurers regard individuals with bad credit as more hazardous than others, which is why they charge higher auto insurance rates.

If your credit score improves, contact your car insurance provider immediately to see whether they will reduce your auto insurance rate. There are a couple of states where vehicle insurance companies can’t look at credit scores, like California and Michigan, among others.

Previously Canceled Car Insurance

Not paying your vehicle insurance premiums on time and then canceling it too soon damages not just your relationship with your car insurer but also your reputation in the entire auto insurance industry.

When another car insurance firm sees that you have canceled car insurance coverage previously, they will be hesitant to insure your vehicle and would most likely want a greater car insurance premium to do so. To see if they’ll give you a cheaper auto insurance premium, talk to an auto insurance representative about the reasons why you previously canceled a car insurance policy.

Your Car Insurance Isn’t Bundled

You may save money on auto insurance if you have a solid relationship with an insurance company. Consider whether combining your automobile insurance with homeowners insurance, renters insurance, health insurance, or a life insurance policy might save you money.

Because you’ve combined all of your policies together, the cost of other protection may go down since it’s now only one insurance premium to pay rather than numerous individual ones. As a result of your confidence in them, the insurance provider will be more inclined to collaborate on unique instances, making it easier for you to get what you need.

Set Your Car Insurance Deductible Too Low

Your car insurance deductible is the amount you pay before your car insurance company steps in. Typically, the higher your auto insurance deductible then, the lower your car insurance premiums will be.

A low car insurance deductible is advantageous if you have been in a collision or car accident since your car insurance coverage will immediately kick in once you pay the car insurance deductible. But, because your car insurance deductible is so low, you’ll be paying much more in car insurance premiums overall.

If you’re a cautious driver who doesn’t often drive, raising your car insurance deductible and taking a chance on yourself may be an option. Even if you drive your vehicle frequently, you may be able to afford an increased car insurance deductible if your plan includes an emergency fund to cover the cost of your car insurance deductible in the event of a car accident. If you find yourself in a financial crisis as a result of an accident, however, you might be forced to remain with your car insurance policy.

Had Big Car Insurance Claims in The Past

Big vehicle insurance claims will always result in higher car insurance premiums. If you don’t want to pay a higher car insurance premium payment in the future, only report what was destroyed or stolen from your vehicle with minimal hyperbole. Frequently asking for more than you require can lead to greater spending in the long run.

Make sure your driving record is free of any judgments or no-fault accidents. This protects you against future car insurance premiums hikes if you’re involved in a car accident that wasn’t your fault.

Driving Record Isn’t Good

People who have been in car accidents, received traffic tickets, or had other poor driving records can be seen as high-risk drivers by auto insurance companies. A poor record will usually require an SR-22, which will result in increased vehicle insurance costs in the future.

There are specialized vehicle insurance agencies that offer such car insurance policies and certifications to high-risk drivers. The good news is that you can improve your driving record gradually by practicing safe driving. Your car insurer will notice and may lower your car insurance premiums.

Shopping for car insurance? Insurance Navy can help you insure your vehicle!

The smartest way to find the best cheap car insurance that fits you and your driving records is to get a free quote from Insurance Navy. Insurance Navy will get you protected and back on the road in no time. Call us at 888-949-6289 or request a quote online. You are also welcome to speak with an agent in person at any of our locations.

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