Why Did My Car Insurance Go Up?

Clearly, it’s frustrating to see your car insurance rate increase. It’s indeed concerning, especially if you're not aware of the root cause, as your premiums can continue to rise.  

If your car insurance rate has gone up recently, it’s crucial to understand why it has increased in the first place, as you definitely don’t want it to become a trend. 

This guide breaks down the most common reasons car insurance premiums rise and explains current average costs, so you can tell whether your increase is typical or a sign that it’s time to review your policy.

Average Car Insurance Cost and Estimated Rise in Premiums

The national average cost of car insurance in 2026 is $68 per month, or $816 per year for minimum coverage, and $225 per month, or $2,700 per year for full coverage.  

While national averages can provide a useful benchmark, it’s even more important to compare your premium with the average car insurance rate in your state, since costs vary widely by location. 

If your premium has increased well beyond these averages or more than typical year-over-year changes, it may be a sign that something specific has changed in your policy or risk profile. In that case, reviewing your coverage can help you identify the exact cause of the increase, especially if you're wondering ‘why is my car insurance so expensive.’

13 Reasons Your Car Insurance Can Increase

Your car insurance premiums can increase due to various reasons. Sometimes it’s the result of a single change, while in other cases it can be due to multiple factors. If you’re trying to understand why your premium has gone up recently, it’s important to learn about 13 possible reasons why your car insurance rate can rise.

Pro Tip: It’s always best to consult with a reliable insurance provider to understand the exact reasons and to find affordable auto insurance coverage within your budget if your current policy no longer fits your budget.

Poor Driving Record

If you have a poor driving record that includes both at-fault and no-fault accidents, along with traffic violations like a speeding ticket, and more severe offenses like DUI (driving under the influence), license suspension, or vehicle impoundment, your car insurance rates can significantly increase.  

Typically, insurers review driving records to verify the risk of car insurance claims. So, if you have a poor driving record, it shows that you’re more prone to claiming insurance, which leads to higher premiums.

Car Insurance Claims History

Similar to driving records, your car insurance claims history is another crucial record that directly influences your premiums. Even your first car insurance claim can increase your premiums by 20% to 50%, depending on the severity of the accident. 

While some insurers have an accident forgiveness policy, it only applies to your first car accident claim. If you have multiple accidental claims in the last 3 to 5 years, your car insurance premiums can spike by 50% to 80% or more.

Increase in Annual Mileage

Annual mileage is another key factor insurers use to determine car insurance rates. The more you drive, the greater your exposure to accidents, which increases the likelihood of a claim. According to the U.S. Federal Highway Administration, the national average annual mileage is 13,476 miles a year. 

In general, premiums may begin to rise once your annual mileage exceeds 12,000 miles. If your driving increases beyond 15,000 miles per year, insurers may view you as a higher-risk driver, which can lead to a more noticeable increase in your rate. If your car insurance premium suddenly went up, driving more miles than before could be one of the reasons.

Adding Vehicles and Drivers to Your Policy

The more vehicles and drivers you add to your policy, the more your insurance premiums are likely to increase. If you’ve recently purchased a new car and added it to your policy, your car insurance rate will go up if your policy includes collision, comprehensive, or full coverage. This is because your policy has to cover the repair/replacement cost of multiple vehicles.

Similarly, when you add another driver to your car insurance policy, their risk profile is factored into your premium. As a result, adding a teen driver or someone with a poor driving record can significantly increase your overall insurance costs.

Your Location

Location plays a significant role in determining car insurance premiums. If accident rates or insurance claims increase in your area, insurers may raise premiums to reflect the higher level of risk, sometimes even if your personal driving history hasn’t changed. 

Similarly, higher levels of insurance fraud in certain ZIP codes or regions can lead to increased rates. Insurers often adjust premiums in these areas to offset the greater likelihood of losses.

When You Move

Moving to a new neighborhood or city can affect your car insurance rate, depending on factors such as local accident rates, claim frequency, and average premiums in the area. Even a short move within the same state can result in a rate change. 

If you move to a different state, the impact can be greater. You may need to adjust your coverage to meet new state requirements, and in some cases, switch insurers if your current provider does not offer coverage in your new state.

Age

Your car insurance premiums can increase when you get classified as a senior driver, typically when you’re 65 and older. While you have substantial driving experience, driving on the road can get riskier, especially due to reaction delays and age-related issues like reduced vision and hearing.  

If your car insurance rate has gone up after age 60, age may be one contributing factor. Similarly, even if you’re in a lower-risk age range, such as your mid-20s or 30s, adding a teen driver or a senior driver to your policy can increase your premium because insurers consider the risk profile of every listed driver.

Changes or Loss of Discount

If your discount amount is suddenly reduced, your car insurance premium will increase. Or worse, if it gets cancelled, especially if you’re no longer eligible for the discount due to a change in circumstances, your premiums can significantly increase.  

Typically, car insurance discounts are usually provided to reward policyholders with a zero-claims track record of the last 3 years or more. Apart from a safe driver discount, there are other types of car insurance discounts like good student discount, student away at school discount, low-mileage discounts, anti-theft system discount, and more.  

So, if you’re no longer a student, you will no longer qualify for student-based discount programs. Similarly, if you drive above 7500 to 10,000 miles a year, you may not be eligible for a low-mileage discount, which can lead to higher premiums.

Policy Lapse

A lapse in car insurance coverage can lead to a noticeable increase in your premium. Insurers strongly prefer continuous coverage because gaps suggest a higher likelihood of missed payments, canceled policies, or uninsured driving, all of which increase risk. 

Even a single day’s policy lapse can lead to a premium increase by 8%; you may also experience similar spikes if you’re uninsured for a week or a month.  

If you’re uninsured for over a month, your premiums can increase by 35% or more. So, if your car insurance rates have recently increased, it could also be due to a policy lapse.

Inflation

Car insurance premiums tend to rise over time due to inflation and increasing costs across the auto and healthcare industries. As vehicle repairs, replacement parts, labor, and medical expenses become more expensive, insurers must charge higher premiums to cover those growing claim costs. 

Based on the car insurance rate increases in the last 6 years, car insurance rates in the U.S. have increased by at least 50% from 2020 to 2025. Here’s a car insurance trend analysis showing the changes in car insurance premiums from 2020 to 2025 as follows.  

• 2020: Average premium $1,483 
• 2021: Average premium $1,674, increased by $191 (+12.87%) from 2020 
• 2022: Average premium $1,771, increased by $97 (+5.80%) from 2021 
• 2023: Average premium $2,013, increased by $242 (+13.66%) from 2022 
• 2024: Average premium $2,350, increased by $337 (+16.74%) from 2023 
• 2025: Average premium $2,697, increased by $347 (+14.77%) from 2024 

While inflation is not the only factor driving higher premiums, it plays a major role by steadily increasing the cost of claims that insurers must pay.

Changes in Your Insurer’s Pricing Policy

Your premiums also heavily depend on your insurer’s pricing policy. If your insurance provider increases the rate for each of their auto insurance coverage, your premiums will also increase.  

So, if your car insurance premiums have recently increased, you should contact your insurer to find out whether there are any changes in their pricing policy. If the answer is yes, then the changes in your insurer’s pricing policy could be the reason why your car insurance rate has gone up.

Credit Score

Your insurance premiums can increase in most states due to a poor credit score. Typically, insurers use credit scores to determine the likelihood of claims in the future. Based on various studies, it was found that drivers with a poor credit score often file more claims.  

Even a drop of one credit tier can increase your car insurance premium by around 17%. So, if you’re located in a state where it’s legally allowed to use credit scores to determine car insurance premiums, your car insurance rates can increase even if you have a good driving record with zero claims history.   

On the other hand, if you’re located in Michigan, California, Hawaii, or Massachusetts, your car insurance premiums won’t increase regardless of your credit score, as it’s legally prohibited to use credit scores to determine insurance premiums in these states.

Switching Insurers

Your car insurance premiums can also increase if you switch to another insurer. Every insurer has a different set of pricing and discount policies. You may no longer get the same discount that your previous insurer offered, or your new insurer may have more expensive premiums for specific coverage.  

So, before switching car insurance, you should closely compare quotes, the scope of discounts, and, more importantly, whether the switch will lead to higher premiums. However, if you have no option and you need to switch insurers due to reasons like moving to another state, then this detailed guide can help you learn how to switch car insurance.

How to Lower Car Insurance?

If your car insurance premiums have increased recently, don’t worry, there are ways to bring them down as well. The best part is, your car insurance premiums are pretty much in your hand, as the rates are mainly determined based on your personal rating factors.  

Just with a little bit of effort and by taking the right proactive steps, it is possible to reduce your car insurance premiums. So, here’s what you need to do to lower your car insurance rate as follows.  

• Maintain a Clean Driving Record  
• Complete a Defensive Driving Course  
• Avoid Filing Small or Unnecessary Claims  
• Review Your Car Insurance Coverage Options  
• Find Out Whether You're Eligible for Discounts 
• Opt for Usage-Based Insurance if You Drive Less  
• Consider Raising Your Deductibles to Lower Premiums  
• Pay Your Car Insurance Premium in Full  
• Switch to a Car That's Cheaper to Insure  
• Get Quotes from Multiple Insurers

Final Tip: Stay Insured and Drive Responsibly

Even if your car insurance rate has increased, it's essential to stay insured. If you can’t afford your current auto insurance policy, you should consider making changes to your policy by reducing coverage limits or by removing optional coverage that is not essential for your situation.

Yet, if you’re still facing difficulties, you can opt for just the minimum mandatory car insurance coverage in your state or switch to a cheaper insurer.   While it’s important to maintain continuous coverage to avoid premium spikes, you should also drive responsibly, as your driving record is a major factor that determines your auto insurance rate.  

If you’re thinking about switching insurers or looking for more reliable and affordable auto insurance, you can contact us for a free quote and consultation.

Frequently Asked Questions (FAQs)

Why did my car insurance go up when nothing happened?

Apart from your driving record, insurance claims history, or credit score, your car insurance premiums can increase due to inflation, changes in your insurer’s pricing policy, or due to the rise in average car insurance rates in your location. Moreover, if you have other drivers listed in your policy, any changes to their driving records, or recent claims, can affect your premiums.

Can car insurance raise rates without notice?

In most states, insurance providers are required to notify you in advance when your premium is changing, usually before your policy renews. While the exact notice period varies by state and insurer, your rate generally should not increase without some form of prior notice.

Why did my insurance go up $100 a month?

A $100 monthly increase usually happens because of major changes like an at-fault accident, multiple claims, a lapse in coverage, adding a high-risk driver, or company-wide rate hikes due to inflation and rising repair costs. In some cases, losing discounts or changes to your credit profile can also cause large jumps in premiums.

Why is my car insurance $1000 a month?

A $1,000 monthly car insurance bill is usually caused by extremely high risk factors, such as serious accidents or DUI convictions, multiple claims, poor credit, a recent lapse in coverage, or insuring a high-value or high-risk vehicle. It can also happen if you’re a young driver or live in a very high-cost area.

Does credit score affect car insurance?

Yes, in most U.S. states, your credit score (or credit-based insurance score) can affect your car insurance premium because insurers use it to predict claim risk. However, it is prohibited in California, Hawaii, Massachusetts, and Michigan, where insurers are not allowed to use credit scores to determine auto insurance rates.