8 reasons your car insurance rate changes | Liberty Mutual (2024)

FAQs

Why does my car insurance price keep changing? ›

While it can seem arbitrary, there are actual reasons you can see your price go up and down. Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.

Increased car repair expenses for parts and labor and higher replacement costs can lead to insurance rate hikes. Additionally, economic factors, such as inflation and changes in interest rates, can impact insurers' investments, prompting them to adjust premiums to maintain their financial stability.

Higher overall auto prices and auto repair costs prompted insurers to start raising premiums as overall car values jumped. Price increases for insurance rates, like many other increases from food to clothing, have been sticky and are less likely to drop at the same rate as broader inflation, if at all.

Rates commonly rise after auto accidents or traffic violations. Premiums can also increase due to life changes like moving or marital status shifts. Factors both within and outside your control can influence your rates.

On average, drivers with poor credit pay 118 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.

12 Factors That Affect Your Car Insurance Costs. The cost of car insurance is affected by factors including your age, gender, location and marital status; the vehicle you drive; your annual mileage; your driving record; your claims history and even your credit score.

Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age and your driving record.

If your car insurance goes up for seemingly no reason when you renew your policy, it's likely due to an increase in risk that's outside of your control. This could include reasons like increased claims in your area (due to more extreme weather damage, more accidents, etc.) and higher car repair and replacement costs.

Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.

Driving record is one of the most significant car insurance rating factors. Insurance companies use actuarial data to calculate premiums. Statistically, drivers with speeding tickets and accidents as part of their driving history are more likely to engage in high-risk driving behavior in the future.

Why is Liberty Mutual so expensive? ›

Liberty Mutual is so expensive because of agent commissions and rising costs overall for insurance companies. At $1,090 per year, the average Liberty Mutual car insurance policy is a lot more expensive than the national average of $671 per year for a policy with minimum coverage.

The car you drive, how often you drive it, and where it is kept are all factors used to determine your rate. A car's make and model help determine: Expected repair costs. If theft rates are higher for this vehicle.

Cars with low safety ratings, high repair/replacement costs, more insurance claims, and a higher likelihood to cause damage to others are more expensive to insure, on average. These cars tend to cost insurers more in claims costs, and insurers price policies accordingly.

Increasing Car Repair Costs

Expensive cars like luxury vehicles and high-end sports cars — those with higher repair costs to begin with — were always pricier to insure. But now that repair costs have increased across the board, insurance companies have begun to quickly hike rates to keep up.

Car insurance premiums don't automatically go down when you pay off your car, but you can probably lower your premium by dropping coverage that's no longer required. Banks and financing companies who loan you money for your car are called lienholders.

Your Progressive rates may increase after six months depending on a number of factors. Like other car insurance providers, Progressive will typically raise your rates if you receive a speeding ticket or moving violation, cause an accident or make comprehensive insurance claims.