Why Did My Auto Insurance Rates Go Up?

You might not always be able to prevent your auto insurance rates from going up, but there are steps you can take to make sure you are getting the most for your money.
insurance rates

You may have received your latest bill and asked yourself, “why did my auto insurance rates go up?”

If you haven’t made a claim recently or have a near-perfect driving record, it might not make sense. But rate increases are an inevitable part of having auto insurance. There are many reasons why premiums go up, and some are unfortunately out of the policyholder’s control.

Current Events

As we deal with the aftermath of the COVID-19 pandemic, skyrocketing inflation and other expensive realities of today’s world, insurance companies are forced to respond.


With U.S. inflation at a 40-year high, the hard truth is insurance companies have higher bills to pay too.  “Inflationary pressure is increasing the cost of repairs, car rentals and vehicle replacements,” according to the American Property Casualty Insurance Association.

When prices go up, so must insurance.

“Insurance rate increases today are simply a reflection of the increasing prices of everything else,” said AAA Northeast’s Frank Doyle, senior vice president of insurance services.

Drivers Back on the Road

At the start of the pandemic, people were driving less, there were fewer accidents and insurance companies were giving money back to customers to make up for it. Now mileage is back to pre-pandemic levels and costs have increased.

In fact, accidents are up too. The vehicle crash fatality rate jumped 12% in the first nine months of 2021 compared to the same period in the prior year, according to the National Highway Safety Administration.

It seems that Americans picked up poor driving habits during the pandemic, as crashes often involved impaired driving, speeding and failure to wear seatbelts.

Cars Have Changed

Modern cars are more than cars. Doyle calls them “computers on wheels.”

Take windshields, for example. They aren’t just protective glass anymore, they often include all the technology for advanced driver assistance systems like dynamic cruise control and lane assist, dramatically increasing the cost to repair or replace them.

“The cost for all significant technology is high compared to what it used to be,” said Doyle. “To repair a newer car could be 50% more” than an older model.

It’s an unfortunate set of circumstances that accident rates are increasing at the same time costs of car repairs and medical care are going up.

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More Reasons for Auto Insurance Increases

How you drive

Obeying speed limits and traffic laws can dramatically affect your insurance costs. Likewise, the miles driven per car per year can earn a discount or create a greater charge for your auto insurance. Ultimately, the safer a driver you are, the more you can reduce your insurance premiums.

Where You Live

A carrier may find that they need to charge more due to higher claims paid in a state where expenses or litigation is higher. Congested cities may be more prone to crashes or have a higher rate of vehicle theft, which could lead to that more expensive premium.


Drivers who put newly licensed teenagers on their insurance policies will see their auto insurance rates increase, since teenagers are typically involved in more crashes than any other age group. Although, as new drivers build experience without crashes, rates do come back down.


Insurance rates for all drivers reflect costs due to the fraudulent practices of the few. Examples include drivers who moved but didn’t report it, parents who don’t add teenage drivers to their insurance plans to avoid costs, staged accidents and drivers who ask for higher estimates at body shops.

questions about auto insurance

What You Can Do

Review your insurance

This is a good time to get in touch with your insurance agent. “Talk to a professional to review what level of coverage [you] have and realize, in general, that costs have changed,” said Doyle.

While some increases are unavoidable, there are some offsets that you can look into. For one, you can consider updating your deductible. If you can handle a higher deductible, it can help to lower your monthly premium.

A review of your insurance policies is recommended annually. Your agent will try to do as much as possible to make sure that you are getting the most from your insurance. There is no cost, and it only takes about 15 minutes.

Improve Your Credit Score

While Massachusetts doesn’t allow it, most states permit credit scoring to help determine auto insurance premiums. Keep on top of your credit score and challenge any errors you find.

Ask About Discounts

While reviewing your policy, ask your agent if you’ve had any discounts recently expire. And while you’re at it, ask if you or your family members qualify for any additional discounts like a good driver, AAA or good student discount. Some providers also offer rate reductions for safety features on your car, paid-in-full discounts, multi-vehicle discounts and bundling home and auto insurance policies together.

Depending on the state where you live, drivers can also receive an auto insurance discount for completing a defensive driving course. The fee to take the class is nominal and the discount usually lasts for several years. Sign up for a AAA defensive driving course.

Avoid Crashes and Violations

Being a safe driver is one surefire way to keep your rates down.

Drivers who get into a lot of crashes or accrue too many speeding tickets will likely see a surcharge or have their insurance tier adjusted. The tier system is a relatively new way of doing things in the insurance industry, in which those with the least number of occurrences pay the lowest rate.

Insurance providers use tiers to rank customers based on their risk of being involved in another vehicle mishap. While not many people like to be ranked, the industry uses the system to get a more precise evaluation of your driving habits and it sometimes helps prevent rates from skyrocketing for a driver just because of one accident.

What You Shouldn’t Do

Plenty of people that have older cars think about dropping collision and comprehensive, but comprehensive – which protects you from damages not caused by a collision, such as theft, vandalism, storms and animals – is relatively cheap coverage that is smart to keep.

If you don’t want to see your rates skyrocket, here’s a lesson learned from the pandemic: “Do not remove your car from your insurance,” stresses Ray Eng, vice president of insurance sales at AAA Northeast. If you go uninsured for a period, it looks like a lapse of insurance and companies will apply a penalty as soon as you try to reinsure. If you have a car that you intend on driving at any point, it’s better to reduce your coverage and keep a policy in place.

Better Safe Than Sorry

Seeing your auto insurance rates increase is undoubtedly frustrating.

Like groceries and gas, “many view insurance as another consumable,” said Eng. “They may wonder, if I haven’t consumed anything (made any claims) why has my rate gone up?” It’s just the reality of the situation right now that insurance prices need to go up with everything else.

Eng suggests looking at it a different way. “The fact of insurance is not if you have a claim, but what would you like to see happen if you were to have a claim,” he said.

Although you might not love paying a higher price for your insurance, you’ll be thankful to have it if you ever need it.

To learn more about coverage options and savings opportunities, get in touch with a AAA Insurance agent today.


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4 Thoughts on “Why Did My Auto Insurance Rates Go Up?

  1. I have been with AAA for a long time I’m 65 years old never had a ticket in my life I had a 2018 Chevy Silverado I had it as a lease I took it back and got a 2011 Chevy avalanche you turned around and raise my rate by 20 some dollars really what the heck is really going on here. It has a Bluetooth alarm on it it stays in my garage when I’m home My Work is only 3 miles away from my house really people not a happy camper.

    1. Hi Susan, I’ve forwarded your comment to one of our insurance specialists. An insurance agent should be in touch soon to answer your concerns. If you’d like, you can also click here to schedule an appointment with an agent at your convenience.

  2. Why have my auto policies costs gone up this past billing? No claims have I had and in almost 1 and 1/2 years, the most any vehicle has been driven is 10 miles one way.

    1. Hi Roald – There are some reasons that auto policies go up that are no fault of your own and may be increased because of the needs of the carrier or state. We suggest reaching out to your insurance agent to go over your policy and any questions you may have. Click here to get in touch with a AAA Insurance agent. Thank you for reading! -MP

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