Why Is Car Insurance So Expensive?

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For some drivers auto insurance can be very expensive especially for those drivers that don’t have a perfect driving history. Here are a few factors that can make auto insurance extremely expensive:

Major violations: Drivers who commit a major violation such as a DWI or driving in excess of 50 MPH over the posted speed limit can see major ramifications on their auto insurance bill. Some carriers will not insure a driver at all who has incurred a major violation and will drop their insurance coverage immediately. Drivers then typically have to find insurance with another insurance company and will usually pay 2-3 times the cost for coverage as a driver who never committed a major violation.

Oftentimes auto insurance can become so expensive in this scenario that drivers will stop driving and turn in their driving license altogether in order to avoid paying insurance. These types of violations usually affect insurance rates for 2-3 years; however, in some states they can affect your rates up to 7 years.

Minor violations: Minor traffic violations can also affect your rates and these may include failure to stop at a stop sign or a minor speeding ticket. These types of violations may increase rates 10-15% for some drivers tacking on a few additional hundred dollars per year. The length of time that these types of violations affect your insurance rates varies but it could be for 2-3 years.

Accidents: Any reported accident that involves your vehicle will be reported to your insurance company. In a no-fault accident or an accident where you were at-fault, you would be responsible for the damages to your own vehicle in which case you would need to file a claim to your insurance company.

After your insurance company pays the claim you can expect to see some sort of increase in your average car insurance premiums. The exact amount your insurance premiums will increase depends on who was at fault for the accident, the amount of damage incurred and whether or not there were any violations committed at the time of the accident.

Lack of Experience: Unfortunately for some young drivers, they pay for the lack of experience that they have on the road. Car insurance rates for newly licensed drivers can cost twice as much as more seasoned drivers who have been insured for over 7 years and maintained a good driving history. Oftentimes an insurance company will considerably drop rates for drivers who have been on the road for 5-7 years.

The good news is that expensive car insurance rates are easy to beat. Maintain a good driving record and avoid tickets as much as possible. If your driving record is already tarnished, turn over a new leaf and enroll in a safe driving course.

This could save you 10-15% on your car insurance. Also, find out if you can package your home and auto insurance with one carrier in which case you may be eligible for substantial savings on your homeowners insurance.

You can also check out how much switching companies could save you with a free car insurance quote:

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For more see our guide to saving money on car insurance.

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