What Could Make your Insurance Go Up – or Down

What Could Make your Insurance Go Up – or DownIt’s the age-old question: Why did my rates just go up? The cost of car insurance can rise and fall for many reasons. Some reasons you’ll have more control over than others. Insurance rates are based on a person’s driving record, car, age, and other demographic factors.

What Makes Auto Insurance Go Up?

Car insurance rates do tend to go up. Here are the main reasons you might see a hike in your rates:

Traffic Violations

Being responsible for a traffic violation is a common reason for rate increases, particularly after more than one incident. Some violations are considered more serious offenses and can cause a larger increase. Major violations that cause rate increases include:

  • Open bottle
  • Careless driving
  • Drag racing
  • Driving under the influence
  • Fleeing from police
  • Driving under a suspended license
  • Wrong-way driving
  • Vehicular homicide

In some states, successfully fighting a ticket in court or attending traffic school is a possible way of avoiding an insurance rate increase due to a traffic violation. As for minor traffic violations, drivers are usually covered for at least one incident such as improperly backing up, failing to yield, or a violation involving a traffic sign.

At-Fault Accidents

If you are considered “at fault” for an accident, your collision coverage should reimburse you for the cost of repairing your car, minus what remains of the deductible. Once a claim is filed stating that you caused the accident, your insurance rates will likely increase. However, some companies provide accident forgiveness for the first accident. Similarly, your insurance company might allow for a small payout without any increase.

Other Damage

Comprehensive insurance, which is typically sold with a separate deductible, doesn’t usually affect a driver’s insurance rates. It covers damage from events like falling objects, hail, flood, or vandalism. But policies vary. To be on the safe side, ask your carrier if they will increase your rate after a certain amount is paid out or if you have had multiple comprehensive claims.

Lapse in Insurance

Any lapse in making insurance payments should be avoided. Doing so signals to insurers that you could be a greater financial risk to them. Rates generally go up based on how long of a lapse occurred. A lapse of over 30 days can cause a significantly higher premium increase than lapsing by a week or two.

That’s not the only reason to avoid a lapse. As soon as you stop paying, you no longer have financial protection if you get into an accident. This poses a problem for people who struggle to pay their premiums, since driving without insurance is unlawful and can lead to state-imposed fines. What’s more, a lapse can stay on your record for years and impact your rates if you switch insurers.


Did you know your insurance rates are also based on claims that come from your area? If you move from the suburbs to a major metro area, you might end up paying more than you did before the move.

So, What Can Make Car Insurance Go Down?

Now that we’ve established the many circumstances that can cause a rate increase, let’s look at the brighter side of the equation. It’s also possible for your auto insurance bills to go down.

A Driver’s Age

Insurers typically charge higher premiums for drivers younger than 25. As your teenage driver gets older, your rates will typically drop, as long as they have a good driving record. Premiums can also go down for people over 50, who are considered less of a risk.


Some insurance companies consider married people less risky, assuming they will get in fewer accidents than single people. Conversely, being single can mean a higher rate.

Policy Adjustment

Drivers can decrease their insurance premiums by taking on more risk. However, doing so limits the circumstances in which your insurer would have to cover a claim. Some examples of policy adjustments that reduce your risk are:

  • Dropping optional coverage
  • Decreasing your coverage limits
  • Increasing your deductibles

Time Lapse

Many of those things that end up on your driving record – a DUI or lapse in payments – are temporary. If your insurance went up after a traffic violation several years ago, check with your insurer to find out if and when it will go back down.

Usage-based Insurance (UBI) and Rewards

More insurance companies are offering discounts as an incentive for drivers to upload apps that track their driving. The only cost is your privacy since they do monitor people’s driving habits. In exchange, policyholders will often remove a few percentage points from their premiums for safe driving. You might receive additional discounts for renewing your policy. There are also UBI programs for low-mileage drivers.

The data is collected via a plug-in device, a port in the vehicle, or a smartphone app. It can be a great deal for careful drivers. Just keep in mind that enough poor driving might cause a penalty, as well.

If you want to know about a specific change in your policy, just reach out to your insurer and ask.

While you’re at it, visit AZ Auto’s insurance page to learn more about insurance rates and how to get the best deal for your circumstances.