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Year in and year out, policyholders see changes in their car insurance premiums – and usually not for the better. Premiums can go up without a warning, leaving people in the dark as to why. Even if you made no claims, did not get in an accident, or kept your driving record clean, you can still end up seeing those higher rates. But what could possibly be behind these rising numbers?

It turns out, there are several factors. Some are factors that could be in your control. Others, however, are totally up to the insurance companies. Understanding what makes car insurance go up helps give you leverage when shopping for yours. Or, at the very least, it gives you some peace of mind.

Why Does My Car Insurance Go Up Every Year?

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Insurance premiums are determined by complex formulas based on several things. These may be economic changes, new statistics, company policies, and the like. Companies take these factors into account when anticipating the financial leverage they might need in the future. They then use these as the basis for how much money they need to generate. And who generates this money? Their customers. Unfortunately, because insurers themselves have little to no control over these things, in particular, there is no getting around it. As such, you would just see your premium go up for seemingly no reason.


Inflation is when there is a sustained increase in the price of goods and services over a period of time. What does this mean for insurance? This results in higher medical costs and repair costs. Inflation would mean insurance companies are paying more for hospital bills when a customer gets in a car accident. This also means higher costs for repairs due to higher wages. At the same time, replacement parts could be more expensive as well. Even the legal costs insurers cover is affected by inflation. Despite higher costs, insurers still need to cover expenses. By raising premiums, they make up for their losses.

Risk Assessments

Is there going to be long-term roadwork in your area? Or maybe the economy was good and more people are buying cars? Every year, insurers review new trends and statistics pertaining to the perceived risk of accidents. For example, studies show that the more road works there are, the more accidents occur. An increase in car ownership also means more cars on the road. This, in turn, leads to more potential collisions. Insurance companies prepare for this increased likelihood of accidents by raising premiums. In this way, they could cover the resulting increase in possible claims.

Total Claims Made

Whether caused by roadworks, increased volume of cars on the road, or whatever other factors, if more claims are made in the span of a year, insurers are sure to increase premiums the following year. Even policyholders who have not made claims are affected by this. Just by living in an area where the number of claims is rising each year, you could pay a higher premium. As in the previous points, this is because insurance companies are anticipating how much they would spend covering these claims. To meet the potential cost, they impose a blanket increase on all of their customers, on top of individual increases for the claimants.

Why Does My Car Insurance Go Up Even If I Didn’t Make a Claim?


Unlike the reasons mentioned above, your car insurance premium could also go up due to things of your own making. Changes in your lifestyle affect your car insurance because it changes how the insurer calculates your potential risk. This could happen even if you do not make a claim. By knowing what these factors are, you could better see why there is a change in your car insurance premium.

Accidents and Violations

Even if you did not make a claim, accidents and violations still go on your record. While the insurance company has not spent for you yet, this shows them that there is now a higher chance that they would. Again, premiums are based on the perceived risks that are present when you are in your car. Getting in an accident or committing a traffic violation even once increases the chances of it happening again. And the more at risk you are of getting involved with these, the more chances of you making a claim. The more chances of making a claim, the higher you pay.

Change of Address

There are a few reasons why a change of address results in higher premiums. If your new location is busier and has a higher volume of cars on the road, this could mean an increase in your premium. If you are moving to a bigger city with a higher cost of living, this directly affects your premium as well. On the other hand, your new address might not be busier or more expensive than your last, but it could have more road accidents on record. Any of these factors raise the risk of you making a claim. As such, the insurance company increases your premium to cover these risks.

It is important to note, though, that not all address changes result in increased insurance rates. If you are moving to a smaller, less busy area with fewer accidents and lower living costs, you might just see a drop in what you pay for insurance too.

Change in Drivers

Adding drivers to your car insurance is another way to see it increase even if you did not make a claim. The more drivers there are, the higher the liability. Insurance companies also look at the driving record of your secondary driver. How much experience do they have? Do they have a clean driving record? What is their age/gender? These all go into account when calculating risk factors. As such, their own record affects your car insurance as well.



Many factors affect the amount you pay for car insurance. It might be factors beyond your control, such as the economy, the rate of accidents, and increased risks in your area. At the same time, it might also be factors that you affect directly. This could be your driving record, a change of address, or a change in the drivers of your car. Whatever it is, it could directly affect your premium without warning. As such, you could see your car insurance go up for seemingly no reason. In the end, however, there is something causing these changes. By knowing what affects your coverage, you could better prepare for the likelihood of it happening again.

About the Author: Ashley Miller

Ashley is an insurance content professional and very knowledgeable on all related subjects. Ashley has over 12 years of insurance content writing experience working with various insurance companies throughout her career.