Why Car Insurance Increases With No Tickets or Accidents

“Why is the cost of my car insurance increasing when I have no tickets, no accidents, and my car gets older each year?”

We receive this question a lot.  Do you have a clean driving record, no claims, yet you notice your auto insurance continually increasing?  You may be wondering why this happens and you are not alone.

MH900382664Auto insurance increased over time for a number of reasons:

  • Increasing Medical Costs
  • Increasing Cost to Repair Vehicles
  • Increasing Cost for Legal
  • Uninsured Drivers
  • Credit Score      
  • Inflation

Increasing Medical Costs – Auto accidents frequently involve injuries.  These injuries are paid for through your liability coverage, uninsured motorist coverage, and personal injury protection.  As the cost of medical care increases; auto insurance rates will also be impacted.

Increasing Cost to Repair Vehicles – According to a study by CarMD.com, the cost of vehicle repairs increased by 10% in 2012.  Vehicles are also being manufactured with increased capabilities and technology such as navigation systems; which are costly to replace.  With the increase expense to repair vehicles, the cost of insurance will also increase.

Increased Cost for Legal – Auto accidents are resulting in more and more liability lawsuits.  The demand for legal counsel and the cost of legal counsel are also on the rise, impacting auto insurance rates.

Uninsured Drivers – The uninsured motorist portion of your auto insurance policy provides you with coverage if you are involved in an accident with an uninsured driver.  In some states, such as Washington, the uninsured motorist portion of your policy also provides coverage for underinsured motorists.  There are an increasing number of uninsured and underinsured drivers on the roadways.  With this increased risk, there is also an increased premium.

Credit Score – In several states, credit scoring is used as a rating factor when determining auto insurance rates.  If you experience a decrease in your credit score, your auto insurance may be impacted.

Inflation – We can see from the examples above, that as the costs for things such as vehicles, medical expenses, lawyers, etc. increase, we will notice an impact on insurance premiums.

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