Do the Rates of Insurance Premiums Increase Every Year?

There are many drivers who are insuring their vehicles every year. One of the first questions they need to ask is if their premiums are going to increase every year they look to renew. In some cases, car insurance premiums can increase. Not everyone has an increase in their cost of insurance premiums. Certain factors will actually contribute to a decrease in your premiums. Typically these are very straightforward. The most obvious factor is your age; your car insurance will begin to decrease once you turn 25 years old. An unfortunate fact facing drivers in recent years is there has been an overall increase in the cost of car insurance premiums.

In November 2008, car insurance rates have increased by 3.8 percent. Several factors have contributed to the hike in insurance premiums. Some factors can include the cost of car repairs; the cost of claims has increased than in previous years. Some other contributors to the increasing cost of car insurance premiums are the rising cost of medical care and staggering jury awards. An increase of car theft and fraud also plays a part in an increase in automobile insurance premiums.

If you pay on a monthly basis for your premiums, the payment tends to be slightly higher than it is when you pay in previous 6 month or 12 month increments. The state where you live can be an indicator for a raise in premiums on your car insurance. For example, one of the highest insurance rate increases happened in Ohio where the rate increase of 4.8 percent in the first quarter of 2008 or by $58.00. This has become a huge blow to the already staggering economy and are causing some individuals to not renew their premiums for the upcoming year.

There are also the usual reasons as to why insurance costs increase for the driver such as traffic tickets, accidents, adding a teenage driver to your plan, or purchasing a newer more expensive vehicle. In rare cases insurance companies can raise the rates of auto premiums for no apparent reason. That doesn’t happen very often. However, there have been incidents where rates will increase even though the driver has a great driving record with no accidents during the previous year. When this occurs review the policy and contact the company to find out if a review of a credit report was done. It has become common practice for some insurance companies to base rates on credit rating.

These varying factors can play a large role in premium increases to your automobile insurance rates. If you are looking for a way to lower these premiums, you should shop around for different rates. This could prevent you from breaking the bank for insuring your vehicle.