My car insurance rates went up. What can I do?

I just received my car insurance renewal and the premium went up almost 10%. I didn't have any speeding tickets or accidents, so what's with the big price increase?

Car insurance companies use complicated formulas in determining the price you pay for your insurance. Occassionally, they will make price adjustments in response to a variety of market conditions such as the cost of replacement parts, a high frequency or severity of claims in a particular area, or to offset losses in other areas of their business such as home insurance.

If you haven't had any price increase triggers such as an accident, speeding ticket or other moving violation, or bought a more expensive vehicle there could be other factors at play. One of those may be your credit rating. Insurance companies use credit scoring to help predict your likelihood of having a claim.

If your credit rating has taken a recent nosedive due to missed payments or overextension of credit, this could be the culprit in your car insurance rates increasing. It's recommended that you monitor your credit on a regular basis in order to make sure there are no errors that may adversely impact your credit score. Car insurance is just one of many expenses in our daily lives that can go up when our credit rating goes down.

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If you haven't had any recent credit changes, then the most likely reason for your car insurance increase is just a normal price adjustment by your insurance company. Often discounts given on car insurance such as for the age of your vehicle may be removed over time. These discounts generally decrease each year until they are no longer applicable to your policy.

There isn't much you can do about a price increase other than talk to your company or agent and try to find out exactly why your car insurance went up. If you don't like the answer you receive, then it might be a good time to comparison shop your car insurance and see if you can get a better rate with a different company.

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