3 Reasons Your Auto Insurance Rates May Increase

Have you seen your auto insurance rates increase recently? If so, the jump in premium may be due to one of these three reasons.

1. You Received a Traffic Ticket

Auto insurance companies look at your driving record when they set your policy's premiums, and certain types of traffic tickets can appear on your record. Specifically, any moving violation tickets that you have been convicted of or have pled guilty to recently will be noted on the record.

Moving violation tickets are traffic tickets that are issued when you break a traffic law while your vehicle is in motion (hence the phrase). These can include tickets for speeding, failing to stop at a stop sign, driving under the influence, and many other infractions. They're distinguished from non-moving tickets, which are issued for infractions like parking illegally.

Should your auto insurance company see one or more moving violation tickets on your driving record, the insurer will increase your policy premiums because your driving habits haven't always been safe and legal. The increase will last for as long as the traffic ticket is listed on your record, which is typically three years.

2. You Purchase a More Expensive Vehicle

If you purchase a new vehicle that's worth substantially more than your current one, be prepared to pay higher premiums for a policy that insures the new car. In particular, your policy's comprehensive and collision premiums will almost certainly increase.

Comprehensive and collision are two types of coverage that protect your car against damage. Comprehensive coverage insures against damage that occurs during non-collision incidents, and collision coverage insures against damage that occurs during collision incidents. Within the insurance industry, a collision is generally defined as an accident that involves two or more vehicles.

Both types of coverage usually cover your vehicle up to its fair market value, and the insurance premiums are set accordingly. If your vehicle is worth more, you receive higher levels of coverage in the event of a claim but also must pay higher premiums. Thus, purchasing a more valuable vehicle will cause these premiums to go up.

3. You Let Your Auto Insurance Lapse

A third factor that insurers look at is how long you've consistently maintained insurance — and they don't want to see any gaps in coverage. If you have a lapse in auto insurance, you'll be assessed higher premiums in the future. Simply maintaining consistent coverage will keep this from being an issue.

To learn more about auto insurance, contact insurance agents in your area.