We recognize that any increase to your premium is disappointing. Sometimes, even if you haven't had an accident or filed a claim, your insurance premiums might go up. Nobody likes paying more, so we'll share some reasons why your rate may have increased.
What factors can influence car insurance premiums?
Many different factors can influence your insurance rates. Below are just a few examples of those factors.
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
- Types of safety features installed
If you drive back and forth on a long, daily commute to work or school, your rates may be higher than a person who drives their vehicle less or has a shorter commute. Generally, the more time and miles you put on your vehicle, the higher the chance you may be involved in an accident.
Other items that may be considered include how long you have been driving, your driving record, and your claims history.
Why Rates and Quotes May Differ
To help ensure you receive an accurate quote, it's important to provide complete and accurate information. Inaccurate or incomplete information can cause the quote amount to differ from the actual rate for the policy.
Some example situations that may lead to differences between the quote amount and the policy rate:
- If you start a quote with only a vehicle make and model but no vehicle identification number (VIN), your rate may change after you enter the full VIN.
- If you leave out information in the quoting process about accidents you've been in (even minor ones), your policy rate may be higher.
- If you forget to provide details about your significant others' driving history, such as speeding tickets, this may lead to a higher rate.
Making sure you have the right information can make the process of getting a quote easier. You will need to have:
- A valid driver's license
- Vehicle identification numbers (VIN) for all vehicles
- The address where the vehicle will be stored
You will also be asked about driving history for you and any other drivers on the policy. To get an accurate quote, it is important to be accurate and complete as possible with the information you provide.
If you decide to purchase a policy and elect to pay your premium in installments, it may result in an additional fee for each installment payment. This can also change the amount you expected to see on your bill.*
What can cause your auto insurance rate to go up?
A variety of factors can go into how we determine your car insurance rate. Here are a few personal factors that can affect your rate when your policy renews:
Change in Coverage
Change in Discounts
- You may have lost eligibility for a discount you were receiving
- A discount may no longer be available
Driving Record
- Accidents that result in a claim can impact your rate
- Speeding tickets may increase your premium
- Your qualification for discounts may also change based on your record
Life Events
- If you move, your premium could increase or decrease
- Marriages, newly licensed drivers, or birthdays can all change your rates
New Car
- Different makes and models have different repair costs
- Newer cars may have enhanced safety and security features
When GEICO sets your premium, we also consider our overall group of insured drivers. You're sharing the risk with a pool of drivers.
Insurance works by transferring the risk from you to us, your insurance company, and to a large group of other people. The cost of repairs, injuries, and damages is shared among those policyholders. That way, you're covered if something catastrophic happens.
How does GEICO try to control car insurance costs?
We're constantly working on ways to control costs and offer affordable car insurance to our customers.
- Multiple options for car insurance discounts
- Coordinated countrywide responses to weather catastrophes
- Driver education programs on the dangers of distracted driving
- Fraud fighting teams and special investigators
- Strong Auto Repair Xpress® network
Please note:
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.
Some discounts, coverages, payment plans, and features are not available in all states or all GEICO companies.
*Certain payment plans may not be available in all states. The fee amount will be shown on your billing statements and is subject to change. Florida policies issued by GEICO or GEICO General with only person injury protection (PIP) and/or property damage coverage must be paid in full.
FAQs
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.
How is the premium increase determined? ›
Insurance premiums vary depending on your age, the type of coverage, the amount of coverage, your insurance history, and other factors. Premiums can increase each time you renew an insurance policy.
What factors determine the premiums charged for auto insurance? ›
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.
What 5 factors determine the premium for a car insurance policy? ›
What factors are most important for car insurance rates?
- Age. Age is a very significant rating factor, especially for young drivers. ...
- Driving history. This rating factor is straightforward. ...
- Credit score. ...
- Years of driving experience. ...
- Location. ...
- Gender. ...
- Insurance history. ...
- Annual mileage.
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.
Which 5 factors determine the premium amount? ›
- Age.
- Gender.
- Smoking.
- Health.
- Lifestyle.
- Family Medical History.
- Driving Record.
7 ways to lower your car insurance premium
- Qualify for insurance discounts. Getting more discounts that lower your car insurance premium might be easier than you think. ...
- Increase your deductible. ...
- Reduce your coverage. ...
- Compare rates. ...
- Try usage-based insurance. ...
- Take a defensive driving course. ...
- Get a car that's cheaper to insure.
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.
How is insurance premium calculated? ›
Insurance premium is determined by several factors, including an insured's age, health, coverage amount, and risk profile. Premiums are determined by actuarial data and statistical models.
How are car insurance premiums set? ›
Unlike the law in most states, California law bars insurers from using credit scores and other secretive info to set their rates. Instead, companies are required to give the greatest weight in determining rates to three factors: how long you've been driving, your driving record, and how much you drive each year.
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.
Why is my car insurance so expensive? ›
Why Is My Car Insurance So High? Your car insurance may be expensive because of your driving history, location, vehicle or credit history. Recent insurance claims and violations can increase your rates for three to five years. On the other hand, it's possible you also just have a more expensive car insurance company.
What influences car insurance rates? ›
What determines your car insurance rates
- Location.
- Driving record.
- Credit history.
- Gender.
- Age.
- Marital status.
- Claims history.
- Car make and model.
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.)
Is it normal for car insurance to increase every year? ›
It's normal for car insurance rates to increase every year even if you haven't changed your policy or filed any claims.
Why did my car insurance go up in 2024? ›
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.
How is the premium calculated? ›
Insurance premiums depend on a variety of factors, including the type of coverage being purchased by the policyholder, the age of the policyholder, where the policyholder lives, the claim history of the policyholder, and moral hazard and adverse selection.
How do you calculate premium adjustment? ›
Life insurance policies calculate the adjustment by amortizing the costs associated with acquiring the insurance policy. The adjusted premium is equal to the net-level premium plus an adjustment, to reflect the cost associated with the first-year initial acquisition expenses.
What determines how much my insurance premiums will be? ›
Your cost will depend on a variety of factors, including your age, gender, vehicle, mileage driven, driving record, coverage amount and deductible. When Does Car Insurance Go Down? Your car insurance premiums typically go down once you turn 25 and continue to drop as you get older.
On what factor is your premium determined or adjusted? ›
The basic premium factor is determined after an insurer sets the standard premium. The basic premium factor is the acquisition expenses, underwriting expenses, profit, and loss conversion factor adjusted for the insurance charge for a policy.
