Why did my car insurance premium go up?

But we get it, news of a higher premium is never welcome. This article will shine a light on why your rate may have changed, plus what you can control and what you can’t. But first, we’ll let Rob explain some of it for you:

An auto insurance rate increase is when the premium you pay for your policy goes up at the time of renewal. These increases happen for two main reasons: changes to your personal profile (like getting a traffic ticket) or changes in the wider world that affect all drivers (like inflation).
 
Insurance companies collect premiums from a large group of people to pay for the claims of a few. When the cost or number of claims goes up, the total amount of money needed to pay for those claims also goes up. To ensure there’s enough to go around, rates are adjusted. So even if you yourself have had no claims, you might be wondering,  why is my auto insurance going up? It’s likely because of these larger shared factors.

This process ensures that any change to your auto insurance premium is fair and directly linked to real-world costs.

Even if you haven’t had any accidents or tickets, your premium can still increase. Let's break down the most common reasons why this happens.

While some things are out of your hands, certain actions and choices can directly influence your auto insurance's monthly cost:

Your record is one of the biggest factors. At-fault accidents, traffic tickets for speeding or convictions for distracted driving will almost certainly increase your premium. Insurers see these as indicators of higher risk.

A history of missed or cancelled insurance payments can negatively affect your rates. Likewise, if you have a previous policy that was cancelled for non-payment, insurers may view you as a higher risk, leading to a higher insurance premium.

Where you live matters. If you move from a rural area to a dense urban centre, you’ll likely see your rates go up. This is because more traffic, more accidents and higher rates of theft in a certain area can all mean a higher chance of a claim.

The car you drive has a major impact. Cars that are more expensive to repair, have a higher rate of theft, or are statistically involved in more accidents will cost more to insure. A sensible family sedan is usually cheaper to insure than a high-performance sports car.

How you use your car is key. If you change jobs and now have a much longer daily commute, your rates could rise. The more you’re on the road, the higher the statistical chance of an accident.

Sometimes you can be a perfect driver and still wonder, "why would my car insurance go up?" As mentioned, this is often due to larger industry-wide factors that are beyond anyone's individual control. Here’s a few of them:

Depending on where you live in Canada, you may have seen an increase in severe weather events like floods, wildfires and hailstorms. These events can damage a lot of vehicles at once, leading to a surge in claims that affects the overall cost of insurance for everyone in that region.

Simple supply and demand affects everything, including car parts and labour. As the cost of living rises, so does the cost to fix a vehicle. At the same time, as more people are on the roads, the frequency of accidents and claims tends to rise, pushing car insurance premiums higher.

Modern cars are packed with amazing technology like sensors, cameras and complex computer systems. While this makes them safer, it also makes them much more expensive to repair. A simple bumper replacement can now involve recalibrating multiple sensors, turning a minor fix into a major expense.

When someone is injured in an accident, insurance helps cover the costs of their treatment and rehabilitation. As medical and therapeutic costs rise, so does the amount needed to settle injury claims.

• Review your coverage: Do you still need collision or comprehensive coverage on an older vehicle? Adjusting your coverage or increasing your deductible can lower your premium.
• Bundle your policies: Insuring both your home and auto with the same company can often get you a discount.
• Enroll in a usage-based program: Good driving habits can pay off. With a telematics program like Sonnet Shift, your premium is partly based on how safely you drive. The better your driving score, the more you could save.
• Maintain a good driving record: This is the simplest one: drive safely, avoid tickets, and stay accident-free.
• Shop around: Don’t be afraid to compare quotes. Getting a new quote is the best way to see if you can find a better price for the coverage you need.

That’s why we keep it simple here at Sonnet, with an online platform that allows you to get a customized quote in minutes. We take the guesswork out of insurance to give you a clear price for the protection you need. Get your free car insurance quote with us today!