Does it seem like your car insurance goes up for no reason? There are many aspects to determining rates for insurance in Dallas, and small changes can have a big effect on your premium. Insurance companies can and do recalculate your rate every renewal and sometimes an increase has nothing to do with your actions. Understanding the factors that contribute to higher automobile insurance premiums will allow you to find ways to avoid those pesky increases come renewal time. Here are four reasons insurance rates go up.
1. Traffic Violations
One common explanation for increased automobile insurance rates is traffic violations. Violations are usually grouped into two categories: minor violations and major violations. Examples of minor violations include failure to yield, following too close, and speeding. Major violations would include driving under the influence (DUI), driving with a suspended license, and wrong way driving. There are ways to avoid having traffic violations listed on your driving record. You can go to court, contest the ticket, and win. You can also attend traffic school or take a driving course. Some insurance companies offer minor violation forgiveness as part of their coverage. Be sure to read all the guidelines for this coverage option and keep in mind it may only apply to one violation per driver. If you’re wondering how long a violation can affect your rates, there is no solid answer. It often varies by insurer and how severe your violation was.
2. Accident Claims
It is likely your insurance rates will go up if an accident claim is filed and you are determined to be at-fault for the accident. Similar to the minor violation forgiveness option, some insurers offer accident forgiveness. This coverage generally allows one at-fault accident claim per driver without raising your premium. Increased rates due to comprehensive claims are less common but do occur. Comprehensive insurance covers damage not resulting from a collision, such as natural disasters, theft, fire, and vandalism. Some carriers increase your rates if they have to pay out more than $1,000 on your claim or if you have too many claims in consecutive years. Some insurance carriers offer a claims-free discount that will lower your premium if you haven’t filed a claim in the last 5 years. This discount however, becomes invalid if the customer files a claim or if someone else files a claim against them, regardless if any compensation is paid.
3. Moving
Did you know your location plays a part in your insurance rate? Insurance rates are partially determined by where you live and how many claims occur in your area. Even moving just a short distance, say from the suburbs to the city or from one suburb to another, could make your insurance in Dallas go up. If this is of concern to you, check with your insurer before making a move to see if it could impact your premium.
4. Reduced Credit Score
You should make an effort to pay all of your bills on time and maintain good credit. Insurance carriers base your rate in part on your credit score. If it drops, your insurance could go up. If you experience a large rate increase and haven’t made any changes to your policy or nothing in your driving history has changed, contact us at ABCO Home Plus Insurance Agency to help you shop around for cheaper insurance.