A sad truth with any form of insurance is that the more you need it, the
less that insurance agencies want your business. If you have enough problems
with accidents, speeding, and other traffic violations, then you might be
dropped by the agency… more likely, though, you’ll just be facing increased
insurance rates. A variety of different factors can cause rate changes,
however, and not all rate changes are bad.
Accidents
Obviously, if you’re in an accident then your insurance company is going to
have to pay for it… after all, it’s what insurance is there for. That doesn’t,
however, mean that they’re going to be happy about paying for it. Accidents
that you cause will almost certainly result in an increase in your premium, and
multiple accidents over a short period of time may result in the termination of
your insurance policy altogether. You should note the key phrase here is
“accidents that you cause”, because if the accident is someone else’s fault
then it’s their insurance company that’s going to have to pay. You should be
aware, though, that many states split the “fault” of the accident, and “no
fault” states are becoming fewer and fewer… and if you’re in multiple accidents
in a relatively short period of time (even if someone else causes them), you
may see a rate increase because your auto insurance provider may think you’ve
been driving recklessly.
Speeding or other traffic infractions
Even though it doesn’t cost them a dime, car insurance agencies do tend to
increase your premium if you are caught speeding or breaking other traffic
laws. The more “points” you have on your driver’s license, the more you’re
likely going to have to pay for insurance. The reasoning behind this is that if
you’re driving recklessly or with disregard to traffic laws, then you’re much
more likely to eventually get into an accident… and if they’re going to have to
pay, then so do you. Some insurance agencies don’t keep as close of a watch on
your driving record than others, but all of them will review your driving
habits from time to time.
Modifying your policy
Adding additional drivers, adding or removing vehicles, or changing your
coverage level can all cause changes in your car insurance premiums. Obviously,
adding additional drivers or vehicles (or increasing the amount of coverage
that you want) will result in higher premiums, but sometimes moving to a new
car that tends to be cheaper on insurance can cause you to have to pay a little
more up front. Even if the end result is a lower premium, making changes to
your insurance policy in the middle of a term can cause you to be billed for
service charges or differences in rates. (You’ll make it up in the lower
premium, however.)