An increase in your insurance rate is often caused by an accident or traffic violation. Other things that can cause your rate to go up are moving, adding a new vehicle or driver, more claims in your ZIP code, and higher costs for repairs or replacements. Know that insurance rates don’t just go up for no reason. Usually, a rise in car insurance rates is due to a higher risk of damage.
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Why Did My Car Insurance Go Up When I Moved?
Moving to a new home can be an exciting time. You get to explore a new neighborhood, meet new people, and set up your life in a new space. But one of the less exciting parts of moving is dealing with all the logistics, like updating your car insurance policy.
You may have been surprised to find your car insurance rates went up after your recent move. While it’s frustrating to deal with a rate hike there are some valid reasons why your car insurance may cost more after relocating. By understanding what causes rates to change you can better prepare for higher premiums and shop for the best coverage.
Frequency of Location in Auto Insurance Rates
One of the biggest factors that impacts your car insurance premium is location. Your insurance company uses your garaging address (where you park your car) and territory/zip code to help determine your rate. Areas with higher rates of accidents, thefts and claims will have higher insurance premiums. If you move from a low-risk area to one with more claims, your rates could understandably increase.
Even moving to a different part of the same city can alter your premium Insurance companies break down territories by zip code or even neighborhood The crime rates, traffic and accident history of your new area become part of the formula used to calculate your rate.
So if you relocated to a part of town with crowded, narrow streets, more accidents or auto theft, insurers see you as higher risk and will charge more. On the other hand, moving to a quiet suburb with little congestion and fewer claims could earn you a discount.
Change in Commute Distance
Insurers also factor your commute distance into your rate calculation. The time and mileage you drive to work each day affects your risk of getting into an accident If your new home adds significantly more mileage to your daily commute, your rates will likely reflect the increased time you’re spending on the road Even just a few extra miles can bump you into a higher rate tier.
On the flip side, if your new home allows you to ditch a grueling rush hour commute for a quick 10 minute drive to the office, you may see your premium decrease. Always be upfront with your insurance company about changes in your commute distance to ensure you’re paying the right rate.
Difference in State Insurance Requirements
Did your move take you across state lines? If so, that alone could cause your rates to change. Each state has its own minimum insurance requirements drivers must meet. Some states mandate more coverages or higher liability limits than others. If your new home state asks you to carry more insurance, your premium will be higher to account for the extra coverage.
For example, Florida requires $10,000 in personal injury protection (PIP) while other states have no PIP minimum. So a move to Florida would mean buying additional coverage to comply with legal requirements there, and higher rates as a result. Always check the specific auto insurance laws for your new state.
Gap in Insurance Coverage
Gaps in your insurance coverage can also lead to higher rates down the road. When you move, your policy with your current insurer will be cancelled. Most states legally require you to maintain continuous auto insurance coverage. If you go even one day without a policy in place during your move, it’s considered a coverage lapse. This red flag will show up on your insurance history and clue companies in that you’re a higher risk.
To prevent this, time your move so your old policy overlaps with your new policy by a day or two. This ensures you avoid any gap that could negatively impact your rates for years.
Changes to Your Car’s Garaging
Does your new home have space for you to park in a garage or carport? Parking inside can earn you a discount with some insurance companies, as your car is less susceptible to weather damage or theft. When you update your address, let your insurer know if your garaging situation has changed. Parking on the street compared to a garage could alter your premium.
Along the same lines, moving your vehicle from a rural area to a dense, urban location can drive rates up. Urban environments with high vehicle volume leave your car more vulnerable to damage. And parking on the street also makes your car an easier target for theft compared to garaging it. Both scenarios can increase insurance costs.
Impact of Credit-Based Insurance Scores
Here’s an interesting factor you may not have considered – your credit score. In most states, insurers use your credit-based insurance score as one piece of information when setting rates. This numerical score is derived from information on your credit report, not your exact credit score. But there typically is some correlation between the two.
Major life events like a move can negatively impact your credit if you accumulate debt or fall behind on bills. A dip in your insurance score results in higher premiums with some companies. So monitor your credit around the time of relocation to ensure it doesn’t take a hit and drive up your rates.
Changes to Your Coverage
Whenever you move, it’s smart to re-evaluate your policy and adjust your coverage to fit your new lifestyle and risks. For example, you may decide you need Comprehensive and Collision coverage for a new expensive vehicle. But adding these optional coverages will raise your rates. Evaluating your needs with your insurance agent can ensure you have the right protections for your new home.
Tips for Keeping Rates Low After Moving
While it may seem inevitable that your car insurance costs will increase after relocating, there are some smart steps you can take to minimize the rate hike. Here are a few suggestions:
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Compare quotes from multiple companies. Don’t just accept a rate increase from your current insurer. Shop around to see if you can find cheaper coverage. Local and national insurers use different formulas, so you may find a better deal.
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Seek out discounts. Ask potential insurers what discounts they offer. Things like low mileage, good student grades, anti-theft devices and bundled policies can help offset rate hikes.
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Increase your deductible. Opting for a higher deductible like $500 or $1,000 can lower your premiums. Just be sure you have savings to cover the deductible if you have a claim.
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Drop optional coverages. If your budget is tight, re-evaluate extras like rental reimbursement or roadside assistance. Removing them reduces your premium.
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Improve your credit. Don’t open new lines of credit leading up to your move. Pay all bills on time and resolve any errors on your credit report to keep your insurance score favorable.
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Inquire about revisions. If your rates seem unusually high, call and see if the insurance company can re-rate your policy or switch your territory to something more affordable.
Moving doesn’t have to mean a steep rate hike on your auto insurance. Understanding what factors impact your premiums allows you to take proactive steps to keep rates low. With a little legwork, you can secure affordable coverage that fits your new lifestyle and location.
Why does my car insurance keep going up?
Your car insurance may keep going up every time you renew it. This could be because rates have been going up over time. Many of the time, these are caused by things you can’t change, like rising costs to fix and replace cars or more and bigger claims in your area.
Car insurance rates can also keep going up because of things that are unique to you and change from time to time, such as where you live, your age, your claims history, your driving record, the make and model of your car, and so on. ). Always remember that your car insurance rates usually go up not when you make a change, but when you renew your policy. You may need to think back to trace all the factors that may have changed in recent years.
Why did my car insurance go up after renewal?
Most of the time, your car insurance rates go up when you renew your policy, not when your rating factors change (like when you move and add a car or driver). Remember that your auto insurance rates can go up for reasons you can’t change, like if the number of claims in your ZIP code went up.
Why Car Insurance Rates Are Skyrocketing In The U.S.
FAQ
Why does my car insurance go up if I move?
Why did my car insurance go up when I change my address?
Why did my car insurance go up randomly?
Why is car insurance higher in some states?
Why did my car insurance go up when I moved?
If you are concerned about why your car insurance went up when you moved, consider location factors that impact your rates. Pay attention to location conditions and state laws to understand what changes you might experience in your coverage. Why should I notify my insurance company when moving?
Does moving out of state affect car insurance?
Notify your car insurer of your new address. If you have a Progressive policy, you can update your address online or over the phone. Like moving out of state, an in-state move will affect your car insurance rate, although the change may be smaller than an out-of-state move. Why did my car insurance go up when I moved?
What causes a car insurance premium to increase?
Speeding tickets or other moving violations, like running a stop sign or getting a DUI, can cause a premium increase. Whether you’re at fault or not, an accident can cause your rates to go up. For example, you may see a change when you file claims for hitting an animal or damage caused by a storm.
Will my car insurance rate go up or down if I move?
The answer is yes, because your rate may go up or down based on your new address. Car insurance rates are affected by your ZIP code. If you’re moving a short distance, your rate may stay the same, but even if you’re only moving across town, your rate could change by a little or a lot.