Nearly everything in life has a price tag associated with it, and that price tag may be lower today than it will be tomorrow.
The same is true for auto insurance rates–they fluctuate. While it is a bit frustrating, rates are calculated on a variety of factors and founded on shared risk. For example, if there is an increase in auto insurance claims, it can affect all insurer’s rates.
There are several other factors that play a role in determining your auto insurance rates, and the following are a few reasons why yours may have increased, or maybe even decreased.
Your Vehicle(s) Affects Your Auto Insurance Rate
Just like every driver is different, every vehicle is, too. This means that the cost to insure each type of vehicle will vary.
This is just a fraction of the equation. But for example, newer cars tend to have higher quality safety features, which are often calculated at a lower cost.
The older the vehicle, the more likely you are to experience mechanical problems which means a higher risk and an increase in your insurance premium.
Your Location Affects Your Auto Insurance Rate
Your zip code is also taken into account when insurance companies calculate your auto insurance rate. These five digits are used to help determine an insurance rate based on accidents, theft, vandalism cases, etc. in that area.
The more there are, the more of a risk there is for the insurance company and the greater the chance of your insurance rate increasing.
If you have moved to a different zip code that has higher risk, then that may be the reason why your insurance rate increased. Other factors based on your location that include population densities, costs of living, and the liability requirements, all of which can affect your overall policy costs.
New Technology Affects Your Auto Insurance Rate
While newer safety features may decrease your insurance rate, newer technology may do the opposite.
This is mostly because there is often a higher price tag to repair new technology in your vehicle, including sensors, cameras, and other fancy features. This factor not only affects your insurance rate but also affects general rate auto insurance prices for everyone.
Find the Right Auto Insurance Policy for Your Budget
There are many factors that affect insurance rates, and they are out of your control. With ever-changing algorithms and increasing rates, it can be hard to find the best insurance provider that meets your budget and vehicular needs.
If you have seen a spike in your rate or are interested in a new policy or provider, we can help. At GWK Insurance, we make it a point to educate, inform, and assist our clients in the process of making the right insurance choices. Contact us today to find the best insurance for you and your loved ones.