If you get a letter that your auto insurance premium is going up, it's important to understand why. There may be something you're able to do to get a lower rate by changing how you drive or changing auto insurance companies.

Rate Increases After an Accident

It's common for your auto insurance rates to go up after an accident. Almost every auto insurance company will raise your rates. The reason they do this is that the more accidents you have, the higher your risk of getting into another accident. It's also possible that you'll file a claim on one of those accidents, and that could cause your rates to increase even further.

The bad news is that your accidents are in a database, so when you switch insurance companies, they'll still know about your accident. The good news is that different insurance companies set their increases differently based on the type of accident and how long ago it was. Even if your rates will go up everywhere, they might go up less at one insurer versus another.

Auto Insurance Claims in Your Area

If there are a lot of people filing insurance claims in your area, your rates may also go up. The reason is that insurance companies see your area as riskier when there are a lot of claims.

Different insurance companies may have different claim rates in different areas, so it's possible one is cheaper than another. They also have different policies about what types of areas they look at when setting their insurance rates.

Inflation

You might think that auto insurance rates should go up with inflation, but that shouldn't always be the case. Your car is worth less every year, so you're insuring less every year. If your auto insurance rates stay the same, that's already a price increase compared to what you're having covered because the worth of your car has decreased. If your insurance company says they're raising rates due to inflation, be sure to shop around.

Speeding Tickets

Speeding tickets are like accidents. They're never going to be a positive when it comes to your auto insurance rates.

Like auto accidents, different insurance companies set their increases differently. A minor speeding ticket might get you a big increase at one place but a smaller increase at another. Any time your driving record changes, you should shop around to see if your insurance company is still the cheapest.

To get a new quote on auto insurance, contact a local auto insurance company today.