Car insurance rates do change often for a multitude of factors and reasons. While it may seem daunting to keep up the ever-changing change with car insurance premiums, truly it’s just part of the insurance process.

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If you changed insurance providers every time rates dipped or rose, you would go insane. So while it’s important to monitor rates, and see what other car insurance providers offer. Remember that all insurance companies change their premiums on a regular basis due to statistical data they are receiving and collecting constantly.

What factors play a role in my car insurance rates changing?

Here is a list of common reasons why insurance premiums go up or down:

• Change of address or location
• Amount of crime in your area
• The economy and inflation
• Time of year people buy insurance
• Types of insurance people are purchasing
• Recent accident

Why is changing my address going to affect my car insurance rates?

Understand that almost everything is analyzed when it comes to insurance rates. An insurance company’s job is ultimately to make money. So even though they are providing you with coverage in the case of an incident with your vehicle, the amount they are charging you for this service is dictated by what the risk is for them. The higher they feel the risk is, the more the premium rates are going to be.

Changing your address can be a positive, negative or non-factor in regards to your premiums. If you are moving from a crime riddled area to safer neighborhood where less automotive theft is occurring, then this could reduce your rates. If you are moving from a safer neighborhood to a higher crime rated area, the converse would be true.

The average age of your area may factor into your rates changing. If you live in a community where the average age is 45 compared to a community where the average age is 25, then this could play a part in the changing of your insurance rates.

How does the economy affect my car insurance rates to change?

In a tough economy less stable insurance companies may have to raise their rates to off-set the event of people filing claims if the insurance company’s financial backing may be in jeopardy. But, if an insurance company has a strong financial foundation than when the economy is tanking, they may be forced to lower their rates to become more competitive with other financially stable insurance providers.

Conversely, when the economy is healthy, financially strong insurance providers may raise their rates a bit. The companies who were worried about closing their doors and had to raise their premiums, would once again lower them because of a more stable economic future.

How does the time of year affect how insurance rates change?

Weirdly enough, this is a metric that actuaries (people who analyze risk for financial security programs and businesses) analyze when figuring out rates of your car insurance. It seems in the summer you have more teen age drivers and college kids driving more regularly or getting their licenses; hence, because younger drivers are a higher risk than drivers over 25, premiums at this time may be rising.

In the fall there are many end-of-the-year sales on vehicles. Due to the spike in new vehicles, which usually are more expensive than used or existing vehicles, one may see again a spike in his rates during this time period.

What types of insurance affect my rates?

If there is a larger amount of people buying higher end car insurance (comprehensive) compared to basic liability coverage, then rates will decrease. The reason being, if the insurance company is having a higher percentage of people purchase more coverage, than pendulum of risk swings in their favor a bit more, and therefore can provide a lower rate on all insurance plans.

In essence, the state car insurance laws help dictate the cost of the most basic form of required coverage which is liability. You will see more variation in cost in the options forms such as full coverage, uninsured motorist coverage and collision.

How does inflation affect my car insurance rates?

As inflation occurs year after year, all businesses need to adjust their rates and prices for their products and services. This rings true for auto insurance providers. With rising costs in medical care, car repairs and the overall cost of doing business, insurance premiums need to keep up.

And if you combine a bad economy with high inflation you have more people out of work, and trying to cut costs. Sometimes this means lowering their insurance covers or driving without car insurance. And if people have little or no insurance coverage, then the insurance companies have to factor these elements in when assessing what their premiums need to be to keep their heads above water.

Is there anything that can cause my insurance rates to actually decrease?

Yes, there are several different instances in which your insurance rates might decrease. First and foremost, maintaining a clean driving record with no accidents and no moving violations will cause your car insurance rates to drop.

Since drivers with a clean driving record are considered safer drivers, they are less of a risk to insurance companies. In these instances, the insurance company may evaluate the driver once a year to determine if the clean driving record qualifies for a reduction in car insurance rates.

There are many different discounts available to you through your car insurance company; however, these rates do not change often. There is a possibility to get a reduction if, for example, you complete a defensive driving course, or have a teenage driver on your policy that is a good student with a “B” or better grade point average. This qualifies them for a good student discount and a possible 10% savings for you. However, this is a discount credited at the beginning of the year and will not change often.

Your care insurance rates will also change if you purchase a safer car with more advanced safety features. In addition, if you get married, or insure more than one car or insure multiple items such as your car and home, you can receive a discount from you insurance company. However, this will not cause your rates to change often, but rather just once per year at the most.

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