Why Did My Car Insurance Go Up Without an Accident?

The cost of car insurance can be shocking. If you recently renewed your coverage, you may be surprised by how much your premiums increased, particularly if you have a clear driving record.

Why did your car insurance go up without an accident? It's a common question, but your driving record is only one factor affecting your rates. Premiums can increase for several reasons and, as a whole, rates are up everywhere.

However, you can still save money on your policy by adjusting your coverage and shopping around.

Key takeaways

• On average, full coverage insurance cost $1,715 in 2024, according to AAA — an 8% increase from 2023.
• Inflation, higher repair costs, and increased claim losses all affect car insurance premiums.
• Comparison shopping, asking about discounts, or adjusting coverage can reduce your costs.

Why your car insurance may have gone up

Industrywide, car insurance rates have drastically increased year after year. Even if you haven't been in an accident or submitted a claim, you're likely paying hundreds more for coverage than you did just a year or two ago. Why do car insurance rates increase? There are several factors impacting your rates.

The economy

As of February 2025, the inflation rate was about 3%. The Consumer Price Index — a benchmark experts use to gauge economic changes — showed that prices have increased steadily since July 2024. As a result, insurance is more expensive too.

Overall economic conditions influence car insurance rates. Inflation increases the cost of parts, labor, and replacement costs. As manufacturing facilities and repair shops face higher costs, insurance companies have higher costs to pay out claims. To offset those higher costs, insurers raise premiums.

Where you live

Your location has a significant impact on your premiums. And rates for your area can change. If your area has experienced population growth, crime rate increases, or survived natural disasters, your car insurance premiums will likely increase.

For example, Florida is one of the most expensive states for car insurance. Its high premiums are due to several issues, including a higher accident frequency than the rest of the country and natural disasters.

Speeding tickets or other moving violations

Collisions aren't the only incidents that can affect your rates. Other driving issues, such as speeding tickets or driving under the influence (DUI) convictions, can raise rates too.

Rate increases for these reasons can be substantial. After a DUI, drivers can see their premiums increase by hundreds or even thousands of dollars. The incident and its impact on your premiums will usually last for three years.

More uninsured drivers

More drivers are hitting the road without insurance policies. According to the Insurance Research Council, 33% of drivers were uninsured or underinsured in 2023, a 10 percentage point increase from 2017.

As a result, the cost of uninsured or underinsured motorist protection, a form of coverage required in some states, and optional in others, has also increased, driving up the cost of car insurance.

Change in credit score

Although not allowed in all states, some states allow insurers to consider your credit when determining your premiums. If you have good credit, you typically save money on coverage. If your credit score dipped (because you were delinquent on your student loans or a vehicle was repossessed, for example), your car insurance premiums could increase.

Higher claim losses

The cost of repairing or replacing vehicles, personal property, and medical bills are also more costly, so auto insurance claims have gotten more expensive. According to the Insurance Information Institute, the average bodily injury liability claim was $26,501 — up nearly 27% from 2020. Because claims are more expensive, insurers increase their rates across the board.

Additionally, there is a higher level of attorney involvement in claims. With more insurance claimants hiring legal representation to pursue a judgment, insurers have to increase their costs to handle the higher legal expenses.

Increased vehicle pricing

If you've visited a dealership lately, you may have sticker shock. Car prices are through the roof. As of December 2024, the average price of a new car was $49,740, up 28% from 2020.

With higher car prices, insurers have to pay out higher amounts for repairs or to replace vehicles, leading to higher premiums for policyholders.

Driver changes

If you recently added a new driver to your policy, such as adding your teen child to your coverage, premiums can go up a great deal. Statistically, teens are more likely to engage in risky driving habits, and they're more likely to be involved in serious accidents than other age groups, so the premiums for a teen driver are much higher.

What to do when your rates go up

Although car insurance rates have increased nationally, there are still several ways to reduce your premiums.

Shop around

Unlike some services, insurance doesn't reward loyalty. Sticking with one company for years is unlikely to help you save money. Instead, insurance experts recommend shopping around for auto insurance at least once per year.

The price between insurers can be substantial. For example, we researched rates from leading insurers, and we found that premiums ranged from $1,200 to $2,200 for full coverage policies.

Change your coverage

While it's a good idea to request quotes from several insurers on an annual basis, it's also smart to review your policy and see if you can adjust your coverage. The following changes could help you save money.

• Raise your deductible: Deductibles are how much you have to pay after a covered incident before your insurer will help with repairs. Deductible amounts vary by coverage type. In general, deductibles range from $100 to $2,000. Raising your deductible — for example, increasing it from $100 to $500 — can reduce your monthly premiums.
• Drop optional coverage: If your vehicle is older or has a lot of miles on the odometer, you may not need comprehensive or collision protection any longer. On average, dropping collision and comprehensive insurance would allow you to save nearly $600 per year.
• Update your usage: Some insurers give discounts to drivers who drive fewer-than-average miles. For instance, if you tend to drive fewer than 8,000 miles per year, you could reduce your premiums by as much as 25%.

Improve your credit

In some states, insurers can review your credit as part of their underwriting process. Drivers with poor credit pay hundreds more for coverage, so improving and maintaining your credit can help you save money on car insurance.

You can improve your credit (and eventually qualify for lower car insurance rates) by making all of your payments on time, reducing your credit card balances, and limiting new credit applications.

Ask about available discounts

There may be policy discounts you're eligible for that you aren't currently receiving. These discounts can be substantial. Common discounts include:

• Good student: If you (or someone in your household) is in high school or college, maintaining a "B" average or its equivalent can reduce car insurance premiums.
• Multi-policy: Bundling your auto coverage with another type of insurance, such as homeowners insurance, may allow you to take advantage of multi-policy discounts.
• Multi-vehicle: If you need to insure two or more vehicles, insuring them together may allow you to qualify for a multi-vehicle discount. Typically, insuring two vehicles together is cheaper than insuring them separately under different insurers.
• Security device: Vehicles with safety or security devices like anti-theft systems may be eligible for special discounts, too.

Consider usage-based insurance (UBI)

UBI policies use telematics devices or mobile apps to track driver behaviors. Many insurance companies provide policyholders with a discount just for signing up. And, if you drive safely, you could slash your insurance premiums by as much as 30%.

When assessing your driving habits, UBI devices and apps consider how many miles you tend to drive, the time of day you usually are behind the wheel, how often you drive over the speed limit, and whether you use your phone while you drive. Obeying posted speed limits, avoiding your cell phone, and driving fewer-than-average miles are all ways to reduce your premiums.

FAQs

Bottom line

When you maintain safe driving habits, it can be frustrating to see your car insurance rates increase. However, insurance premiums can increase for a variety of reasons, including inflation, the higher cost of car parts, and current vehicle prices.

With rising car insurance prices, it's even more critical to shop around and compare rates from several insurers. Comparison shopping, adjusting your coverage, and asking about potential discounts can help reduce your rates so you can save money on your premiums while maintaining adequate protection. Our list of the best insurance companies is a good place to start.