This is one of the most common reasons for an auto insurance rate to go up. Violations are typically classified as either minor or major. Minor traffic violations include things such as speeding, failure to yield, driving without a license, using an uninsured vehicle, following too closely, improper backing/passing, running traffic lights or signs, failure to signal, parking violations, etc. Some examples of major traffic violations are reckless driving, driving under the influence, leaving the scene of an accident, failure to stop for a police officer, driving with a suspended/revoked license or vehicular homicide. If you do receive a traffic violation, there are a couple of things you may be able to do to avoid an increase in your premium. If you fight a ticket in court and win, it should not affect your driving record. Traffic school, which involves taking a course and passing a test, is another option in some states to avoid an insurance rate increase.
At-Fault Accident
If you are the cause of an accident and a claim is filed, you can expect your insurance rate to go up. Some insurance companies offer accident forgiveness which allows each driver to have one at-fault accident claim, or a buffer that allows for a small payout (usually under $500) without a premium increase. However, you will be charged more for this type of coverage without knowing if you'll need it or not. Know what kind of driver you are and check with your insurance provider to see if this coverage is available and how much it will cost.
Aging
Growing old is out of our control unfortunately. Elderly drivers, typically over the age of seventy, may pose a greater risk on the road due to sight or hearing loss, fading memory, medication with dangerous side effects, stiff muscles and joints, or slower reaction time and reflexes. Because of this, it's common for insurance rates to climb after a certain age.
Moving
Some people don't know that insurance rates are often based on claims in an area. Moving out of state, or even to a different city, can sometimes cause your rate to change. For example, you would likely have a higher rate if you lived in a major metro area rather than a suburb or a rural town. The likelihood of an accident happening or a traffic violation occurrence is greater the more cars and people there are on the road.
Lapse in Insurance
You are instantly pegged as a potential risk taker if you have a lapse in your car insurance. This is any period of time that you have registered a car, but do not have auto insurance. Being uninsured will result in fines and various other penalties, depending on the state. Your rate will be more expensive the longer you wait to renew your auto insurance policy. Many insurance carriers do not allow a grace period for a lapse in coverage unless you are trying to reinstate your existing policy.
Drop in Credit Score
It is common for insurance companies to use your credit score as a contributing factor when selecting your premium. Credit scores are used to determine a person's financial risk and creditworthiness, and studies have shown that there's a good reason to use credit-based scoring when it comes to insurance rates. If your credit score suddenly plummets, there is a chance your insurance rate will go up. California is currently the only state that prohibits insurance companies from utilizing credit scores for this purpose.
There are many factors that go into calculating premiums, and any of the scenarios mentioned above can make a significant impact. The better you understand what causes a rate increase, the better off you will be in preventing it from happening to you.
Let's talk auto insurance! Give ALINK Insurance Services a call today to discuss your insurance needs. We are "Your Link to Security!"
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