Four Things You Didn’t Know Are Raising Your Car Insurance Rates

When you think of your car insurance rates, you probably think about getting into a car accident, or adding a teenager to your auto policy (ouch!), but there are other factors out there that insurance companies and their ever-busy underwriters are looking into to determine your rates and if these factors change, you could suddenly find yourself slapped with a higher premium for car insurance coverage seemingly out of the blue. So aside from the obvious factors that you may not have control over (like growing kids and accidents), here are some not-so-obvious ones that you will want to keep an eye on in order to keep your rates low:

1. Your credit score: That's right, your credit score rears its (possibly ugly) head yet again when it comes to making your life difficult. On the flipside, having a great credit score will do nothing to improve your auto insurance premiums, so this is almost purely a punitive measure by those insurance companies that choose to employ it. The rationale given by the insurance companies is that people with lower credit scores represent a risk because they have shown themselves to be less-than-perfectly-responsible with their credit in the past. Even though insurance companies do not extend credit to their customers, there is a cost associated with an account that must be terminated for non-payment, and it represents for them, a "change of the game", however slightly, in balancing their risk pool.
2. Forgetting to turn in forms: When you are signing up for a new insurance policy, your insurance company will probably ask you to sign and/or send in certain forms. Failing to do so, or sending in the forms late will most likely result in your receiving a higher rate than was quoted to you. Though this can be an inconvenience, this increase may be remedied by calling the insurance company after you have submitted the proper documentation - do not expect the insurance company to lower your rate on their own after they receive what they requested - what would be the fun in that?
3. Buying a new car: You’re paying a certain amount now for your auto insurance and you may be loving it or hating it, but you’d be surprised just how many people forget that with a new car will come a new insurance rate as well. Sometimes this new rate will be higher, but if you’re lucky (or wise in your research before buying), it may be lower as well. Typically insurance is less expensive for older vehicles.
4. Moving: It’s a simple principle, if you move from the middle of nowhere, to the middle of a large metropolitan area, your rates are going to go up - drastically. Why? Because of the increase in risk that you are going to have an accident since you are around far more people. Beyond population, your auto insurance may also increase for moving based on other geographic factors such as the crime rate. Phoenix, Arizona, for example, is the car theft capitol of the country. Moving there from anywhere is going to cause any theft insurance premiums on your vehicle to hit a new high.

Just to keep in mind, of course, life's circumstances may throw some of these situations at you beyond your control (such as needing to move), but knowing how it may affect your insurance rates might help you to decide which neighborhood to move into, if it can mean a savings of dozens or hundreds of dollars in yearly premium.