Why Is My Car Insurance So High With a Clean Record? Factors You Might Be Overlooking

You’re a cautious and attentive driver with a squeaky-clean driving record, clear of traffic violations, accidents, or claims. However, the cost of your car insurance continues to climb, leaving you to wonder, “Why is my car insurance so high with a clean record?”

The simple answer is that more factors go into the cost of car insurance than just your driving record. Your age, credit score, location, and more can all potentially influence what you end up paying for car insurance coverage, no matter how clean your driving record is.

How are car insurance premiums calculated?

The most significant factor influencing the cost of car insurance premiums is risk. If you’ve had some accidents or have racked up a bunch of traffic tickets, your insurer sees you as a risky driver and jacks up the rate you pay for car insurance.

But judging a driver’s risk level goes beyond just how they conduct themselves behind the wheel. When calculating your car insurance premiums, insurers also consider your age, gender, occupation, education, marital status, credit score, the car you drive, how many people are on your policy, and how often you drive. Other factors beyond your control, like inflation and the riskiness of your neighbors, also play a part in what you pay for car insurance.

The coverage limits and deductibles you choose on your car insurance policy also heavily influence how much your car insurance premiums will be. Higher coverage and lower deductibles will cost you significantly more than having minimal coverage with high deductibles.

Why is my car insurance so high?

Let’s delve a little more into factors besides your driving record that contribute to the cost of your car insurance.

Age

There is such a thing as age discrimination when it comes to car insurance. Insurers are within their rights to charge you more for car insurance based on your age. For example, teens and seniors over 70 typically pay more for car insurance because they are considered higher-risk drivers than middle-aged adults.

Gender

Generally, women benefit from lower car insurance premiums than men because they are considered less risky.

Marital status

As a single woman, this one bothers me. Apparently, married drivers are less likely to file insurance claims than us singles and, therefore, get better car insurance rates.

Credit score

Having a low credit score can also increase your car insurance premiums. It indicates to the insurer that you aren’t the best at paying your bills, so there is a higher risk that you won’t pay your insurance premiums. However, some states prohibit insurers from using your credit score as a factor in determining premiums.

Vehicle

The age, condition, and type of vehicle you drive also impact insurance premiums. Insurers look at the potential costs to repair or replace your vehicle, and the higher those costs are, the more you’ll pay for insurance. If you’re driving a sports car, chances are you’ll pay more for insurance because you’re more likely to drive riskier than you would in a sedan. Pricey sportscars also have a better chance of being stolen or broken into.

Zip code

Where you live also plays a big part in your car insurance costs. If your neighbors have riskier driving habits than you do, you’ll be penalized with higher car insurance rates. Living in areas more prone to car theft and vandalism will also increase your rates.

Insurance coverage

Basically, the more coverage you have, the higher your premiums will be. Most states require all drivers to carry a minimum level of car insurance coverage, but that level may not be sufficient to cover all your costs in an accident. Adding comprehensive and collision coverage will increase your premiums. Low deductibles, which is the amount you must pay for, will also lead to higher car insurance premiums.

Inflation

Inflation increases the cost of almost everything, including car insurance. When the price of goods and services required to repair your vehicle increases, so does the insurance that pays for those repairs. According to the Bureau of Labor Statistics, the cost of car insurance increased by more than 22 percent in the first four months of 2024 over 2023.

How to lower car insurance premiums

While some factors of your car insurance costs are beyond your control, you can still do some things to reduce the cost. Here are a few things you can do to lower your car insurance premiums.

Shop around

While it’s easy to become complacent about your car insurance if you’ve been with the same insurer for years, you may be able to find better rates if you shop around. I had GEICO coverage for years, and every year my premium increased while my coverage stayed the same.

While writing an article on Costco car insurance through American Family Insurance, I received a quote for more coverage for less money than I was paying, which prompted me to switch car insurance. This was a couple of years ago, and my premiums have increased again at every renewal since then, so I’m ready to shop around again to see if I can lower my costs.

Ask about discounts

Most insurance companies offer discounts that may help you save money on car insurance if you are eligible. Discounts vary depending on the insurer and could include discounts for good drivers, multi-car policies, good students, bundling, autopay, and completing a defensive driver course.

Increase your deductible

A deductible is the amount you have to pay out-of-pocket before your insurance kicks in. The lower your deductible, the higher your car insurance premium. By increasing your deductible, you can save money on your premium.

Improve your credit score

Since your credit history is a factor in how much you have to pay for car insurance, you can lower your costs by increasing your credit score. To improve your credit score, you should get copies of your credit reports from the three main credit bureaus – TransUnion, Equifax, and Experian – and review those reports with a fine-toothed comb and dispute any inaccuracies you find. Paying your bills on time and lowering your debt utilization can also help improve your credit score.

FAQs

Bottom line

Your car insurance premiums can be higher than you’re comfortable with, even with a clean driving record. This is because many other factors determine the cost of your car insurance, such as your age, location, and even the car you drive.

The key to managing your car insurance costs is staying proactive. Review your policy regularly, compare quotes from different insurance companies, and explore options like increasing your deductible or improving your credit score to save money. By taking these steps, you can work toward lowering your car insurance premium while still protecting yourself and your vehicle on the road.