When you apply for an auto insurance policy, your agent will give you a quote on the premium you will be expected to pay. You might pay it in a lump sum, or in installments throughout the policy term. However, when the time comes to renew your policy, you might see that your premium is higher than it was previously. 
Car insurance premiums are not solid. They can change as factors like your driving habits, vehicle value and driving record change. There are many different reasons that policy rates might go up, but in the end it all comes down to one thing: risk.
Auto Insurance Premiums and Risk
When you apply for almost any insurance policy, your insurer will gather information about you to determine what sort of a cost liability you are to them.
Customers who are more likely to file claims on their policies or who stand to receive a high amount of compensation for any claims are riskier to insure. To adequately protect their own investment in these drivers, the insurer might have to charge them more as a result. Therefore, even though you and your neighbor might have the same policy, one of you might pay more than the other.
Common Reasons Premiums Increase
If you see that your auto insurance premiums have increased, then there is likely a reason. Some of these might be related to big changes in your life, while others might be less conspicuous. Among the most prominent triggers of rate increases are:
1. Market Changes
You are just one of thousands of drivers who your insurer covers. Therefore, as their customer profile and the local economic outlook changes, they will likely have to make periodic adjustments to premiums to balance the cost. However, increases in premiums due to changes in the market are often nominal, particularly if you are a low-risk driver. Some insurers do not even raise rates on their best customers in these circumstances.
2. You Filed a Claim on Your Policy
A claim on your auto insurance is one of the most obvious way to trigger a premium increase. After all, when you make a claim, then you will cost the insurer money and demonstrate to them that you are someone who faces higher driving risks.
Particularly if you are at-fault for a wreck or other vehicle damage, your rates might increase. However, the rate increase usually won’t occur until you renew your plan. Still, if you were not at fault for the damage your car received, but you must use your own policy to pay for it, some insurers will not raise your rates.
3. You Broke the Law
Your insurer will review your driving record to gauge exactly how much they can trust you behind the wheel. If they see that you have received tickets, DUIs or other driving charges, then they are likely to raise your rates. These are clear indicators that your driving habits put you at a clear risk of having to file a claim on your plan.
4. You Bought More Coverage
If you decide that you want to buy higher coverage limits or add extra perks into your auto policy, then you can expect your policy to cost you more. Buying more coverage means increasing the financial risk to the insurer.
5. You Moved
Depending on where you live, local driving risks are different. For example, in areas with high populations, there are often higher risks of wrecks because there are more drivers. Threats of theft or other vehicle accidents might also be higher. Therefore, moving might trigger a rate increase.
6. You Bought a New Car
When you buy a new car, the new vehicle is likely worth more money than the old one, and you have more to lose in case of a wreck. Plus, if you financed your new car, you might be required to buy physical damage insurance on your policy, even if you didn’t have it on your old one. Therefore, your auto insurance rates might go up.
7. You Are Driving More
If you drive more, you will likely encounter more accident risks. Therefore, people who commute everyday typically pay more for their coverage than someone who is retired and doesn’t drive much.
8. You Lowered Your Deductible
If you have deductibles on portions of your coverage, then you have agreed to bear a certain financial responsibility for a claim yourself. This impacts how much the insurer might have to pay you for vehicle damage or other losses. As a result, drivers who carry lower deductibles shift more cost burden onto the insurer, and therefore might pay higher rates. When selecting deductibles, it is crucial to calculate how they fit within your overall budget.
Even if you do see your auto insurance rates rise, you have options to help control costs. Your agent will still be able to see if you qualify for applicable discounts, which can stem the tide of the increases. Plus, if necessary, they can help you restructure your current policy to decrease costs, or search their carrier network for a new plan that will offer you better cost options while still providing strong benefits.