Car insurance costs can take a sizable chunk from the household budget for many families, especially those that have more than one driver and two or more vehicles to insure. While policy coverage amounts can remain stable, insurance costs can rise sharply for reasons that the family may not immediately recognize.
Homeowners who are alarmed by recent increases in their car insurance costs can use the following information to help them determine the cause of their higher insurance bills and find possible solutions for bringing the costs back down.
Falling credit scores
Insurance companies use risk as one of the ways in which they decide insurance rates for their policyholders. Drivers who maintain good FICO scores and positive ratings from the three main credit bureaus are typically seen as being the most adverse to risky behavior that could increase the chances of being involved in a traffic accident.
Drivers who have allowed their credit scores to fall after taking out their car insurance policy often see increases in premium amounts with a few months of the change. If your policy cost increases are caused by falling credit scores, taking steps to rebuild your credit with timely payments and better spending habits will help to reduce the cost of future car insurance bills.
Changes to traffic records
Most state driving record information systems assess points against their driving license each time they receive a traffic violation. Just as they monitor credit bureau information, insurance companies also monitor driving records to help determine which drivers are most likely to be involved in a traffic accident. Drivers who have traffic violations on their driving record are considered to be riskier to insure than drivers who maintain a clean driving record.
Car insurance providers routinely review traffic records when policies are first written and again at periodic intervals during the coverage period. If negative changes are found, insurance providers typically raise policy rates to account for the perceived increase in risk the driver may present. Drivers who have received traffic violations that are causing insurance rates to rise should speak to their insurance provider about possible ways to lower their premiums until the negative driving entry ages enough to drop off their driving record. In some instances, these drivers may be able to reduce insurance costs by completing a safe driving course or installing a monitoring device in their vehicle.
Marital status or changes to gender
Even marital status and gender changes can affect vehicle insurance costs. Most companies use data that suggest that people who are married or those who identify as female are less risky to insure and set their policy prices accordingly. Drivers who are interested in lowering their car insurance costs should start by discussing their situation with an auto insurance broker or agent in their area.