3 Reasons Your Car Insurance Rates Fluctuate
Several factors influence insurance cost fluctuations. For instance, if claims increase in your area, the insurance companies will revise their insurance rates to reflect this. Life events like adding a family member to your insurance policy or purchasing a new vehicle also affect premiums.
Read on to learn why your car insurance premiums fluctuate.
Adding or Removing a Named Driver
If your child is of age and they acquire a driving license, you can add them to your auto insurance policy as a named driver. Friends or family members also qualify as named drivers. Once you add them to your insurance policy, your insurance premiums will increase. Insurance companies consider teenage drivers high risk, so expect your insurance costs to rise significantly if you add them as named drivers.
On the other hand, if you add experienced drivers to your policy, your provider may sometimes reduce your insurance cost. The same applies if you remove someone as a named driver.
For example, if your child moves out and no longer drives your car, your insurer can allow you to take them out of your insurance policy, ultimately lowering your insurance rates.
Your Location and Environment
Insurance companies consider some locations riskier than others. If you relocate to a place with a high crime rate, your insurance rate rises because your provider perceives that the chance of your car being vandalized, stolen, or broken into is higher.
The same happens if you move to an environment where natural disasters like flooding, hurricanes, and tornadoes are rampant. These extreme weather events cause more claims, and insurers have to spend more to cover car damages. So, you pay higher insurance premiums to have your car insured.
Fortunately, if you move to an area with a low crime rate and natural accidents rarely happen, your insurance costs decline accordingly.
Your Car Model
New cars cost more to repair due to the high costs of repair parts and the risks of theft or break-ins. So, before you splash money on that dream car, find out from your auto insurance provider how the car will affect your insurance rates. Additionally, vehicles with high-demand parts are a common target by thieves, so they cost more to insure.
In addition, most electric cars aren't cheap to repair. So, your insurance costs will go up if you move to a neighborhood where many policyholders drive electric cars. If you collide with such vehicles, your comprehensive coverage will have to foot the costs of repairs, which can be pretty significant.
For non-electric vehicles, the cost of repair and replacement parts reduces as the car ages, so your insurance premiums are likely to decrease.
Talk to an auto insurance agent near you for more information on why your insurance rate changes and how you can save money on insurance.