Is It Normal For Car Insurance To Increase Every Year?

One factor that could increase your car insurance rates each year includes filing a new claim, changing or adding to a vehicle or driver, or increasing coverage scope; as well as external financial trends.

Car insurance rates often increase even without making claims or receiving traffic violations, and here are six potential causes why your rates might be increasing.


As other costs continue to soar, car insurance costs appear to be skyrocketing faster than ever – now contributing more significantly than food and housing to overall inflation, according to the consumer price index report.

Higher rates can be attributed to several factors. One such cause is rising repair and replacement costs due to limited qualified mechanics, high labor rates and tech-enabled vehicle complexity – leading to higher claims losses for insurers which then forces them to increase premiums to compensate.

Another factor contributing to rising car insurance premiums is severe weather incidents. More frequent and intense storms can cause costly damages when roads are congested with people trying to evacuate or reach their homes quickly. Furthermore, stolen cars have increased and so has the cost of replacing parts like catalytic converters; all of this accounts for its dramatic surge.

Auto insurance is mandatory in nearly every state and rates can vary widely based on provider, coverage and location. Drivers can attempt to keep costs down by searching for competitive quotes; consider how a driving record affects cost such as number of violations and at-fault accidents they have had; type of vehicle such as newer models that may cost more to insure; built-in safety features can have a huge effect; unexpected increases may arise if something such as missed payments are missed, violations aren’t disclosed properly on an application etc.


As car insurance costs continue to increase, drivers need to understand why. One key reason may be that insurers are paying out more claims, requiring them to raise rates accordingly.

Car insurance claims come in all shapes and sizes, each impacting your premium differently. Comprehensive claims tend to raise rates more than at-fault accidents do; however, individual cases such as parking lot fender benders don’t cause rates to go up as significantly as an incident that causes injuries does.

Your insurer may perceive you as high-risk customer if you’ve filed one or more claims in the past, causing their rates to go up accordingly. However, insurance companies generally only consider recent three to five years when calculating rates and so an incident won’t remain on your record forever; rather, after enough time has passed it might even no longer appear in their calculations at all!

Other factors that can contribute to higher rates include your home or business location, speeding tickets received and even credit rating. Furthermore, certain forms of weather damage (like hailstorms or hurricanes ) can increase rates even though you were not responsible.

Reinsurance costs, which are purchased by insurers to protect them against large losses, is another major contributor to increasing auto insurance rates. Due to inflation and supply chain disruptions causing large-scale reinsurance losses in 2024, insurers were forced to raise their own rates accordingly and push your rates higher.

Driving record

Your driving record, which includes accidents and convictions, has an enormous effect on the cost of insurance premiums. Even one traffic violation or accident can significantly raise premiums depending on its severity.

Clean records demonstrate that you are an upstanding driver, less likely to file claims and reduce risk. This enables insurers to offer discounted premiums as they favor those with clean records.

On the other hand, having an adverse driving record indicates you as being more of a risk than usual, increasing the odds that an accident will happen and require filing an insurance claim – something which increases insurance rates as insurers must offset liability risks with higher payments.

Notably, your driving record plays an essential part in your insurance rates regardless of where you reside. But other non-driving factors may also have an effect on its cost – these may include location factors that impact weather-related claims such as hail and snow as well as medical care or car repairs costs.

Insurance companies conduct background checks when you request a quote, apply for insurance or add another driver to your policy. While their investigation timeframe varies from state to state, most will run three to five year checks of driving history before making their decisions.

Your driving record can be obtained from the Department of Motor Vehicles in your state, although third-party providers also offer this service, which usually cost extra and could provide inaccurate records.

Vehicle type

Your choice of vehicle can have an effect on the cost of insurance as well. Insurers take several factors into consideration, including its size, weight and height as well as intended use and repair/replacement costs. They also consider crash statistics and the likelihood that it will be stolen or damaged; some models of cars have expensive components or higher accident rates which make them more expensive to insure than others.

Luxury features like sunroofs and leather interiors can make driving more pleasurable, yet they may increase insurance costs. This also applies to safety features like airbags, anti-lock brakes and electronic stability control; insurance companies take this information into consideration as they determine your premium cost. Insurance providers also consider how often and far your commute occurs as these can have an effect on overall mileage usage of the car.

Age can also play an influential role. Teenagers pay higher car insurance premiums due to being at greater risk of getting involved in accidents compared to older drivers, due to reckless behavior on the road and claims for damage sustained from accidents involving reckless teen drivers. Your rate also increases with every moving violation you get and any accidents you cause, increasing further with each.

Insurers also consider the age and driving records of other individuals who use your vehicle, as well as your annual mileage totals. The more miles driven each year increases your chances of an accident or damage to the car – thus justifying why drivers who commute long distances or run many errands often pay more for insurance than those who drive only to work and back each day.


Age plays a pivotal role in car insurance rates. Premiums decrease with age as insurers perceive them to be less of a risk due to greater driving experience and possibly fewer incidents or traffic violations on their driving records. Insurance costs tend to start decreasing from 20s onwards until drivers reach 60 years of age, or later.

Kyle Barone, 26, has experienced his premium increase from $140 per month to $226 since purchasing a Volvo sedan in 2020. Although initially unsurprised by this news from USAA that his policy would increase to $278 monthly premium payments he was nonetheless stunned when they informed him last month of this increase.

Insurance companies are facing numerous factors that have increased the cost of auto insurance policies. First, due to pandemic illness reducing driver participation on the roads and leading to lower accident thresholds – thus making insurance industry more profitable – but as soon as roads reopened more accidents were occurring at an increased rate than normal, meaning insurance companies were paying out claims at a greater frequency than expected and needing to increase policyholder premiums as compensation against these losses.

Other factors influencing auto insurance rates include an increase in extreme weather across the nation, leading to vehicle damage that costs costly repairs. Labor costs have also contributed to skyrocketing insurance premiums; J.D. Power found customer satisfaction had fallen 12 points since 2016 as prices continued to soar; rising premiums are making some consumers hesitate about renewing their policies.