Why Is My Car Insurance Going Up?

Rising Rates in California

A trending concern on many drivers’ minds these days is car insurance—particularly the dilemma of rising rates. According to the latest data from the Consumer Price Index, motor vehicle insurance premiums have risen 51% in the last three years.?

As a lawyer who deals predominately with motor vehicle accidents, I see too many car accident cases where one driver is injured by an uninsured driver.?

It is estimated that over 16% of Californians drive without auto insurance, and with new insurance limits taking effect in 2025, this percentage is likely to grow.?

So what can be done to address the issue of rising insurance rates and uninsured drivers?

Firstly, let’s debunk a few common myths about car insurance:?

1. Driving an expensive car always increases your premiums.?

2. Your credit score does not affect your rate.

3. Red cars cost more to insure than other colors.?

4. Getting into an accident or getting a traffic ticket will automatically increase your rate. 5. Having the minimum liability insurance is sufficient coverage.?

Car insurance rates are determined based on the driver’s age, driving record, location, car make and model, credit history, coverage level, and mileage.?

Now, let’s examine why car insurance rates have been increasing.?

• More serious accidents and injuries: Traffic incidents have become more severe, which increases insurance claims and costs. According to the National Highway Traffic Administration (NHTSA), 42,514 people died in car crashes in 2022. An increase in speeding, DUI violations, and distracted driving have contributed to the rise in traffic-related injuries and deaths.?
• Severe weather: Extreme weather events like wildfires in California damage vehicles and disrupt lives, leading to more claims and higher insurance premiums.?
• Vehicle repair costs: Inflation has driven up the cost of vehicles, vehicle parts, and skilled labor, further raising repair expenses and impacting insurance rates.?

How to Save Money and Protect Yourself on the Road

To save money on auto insurance, consider the following:?

• Shop around: Compare quotes from multiple insurance providers to see if they offer a better rate than what you currently have. Rates can vary based on the insurer and location, so getting several quotes is a good idea if you’re looking to save money.?
• Consider driving an older, less expensive car: Older cars are generally cheaper to insure because they have lower replacement costs and are often less expensive to repair. This can reduce both your insurance premium and potential repair expenses.?
• Increase your deductible: Opting for a higher deductible can lower your premium, though you’ll need to be prepared for higher out-of-pocket costs in case of a claim. It’s a trade-off, but it can lead to significant monthly savings.?
• Ask for discounts: Most insurers offer discounts for students, military, and drivers with clean driving records. Additionally, installing anti-theft devices in the vehicle and going paperless can help you save.?
• Improve your credit score: Your credit score directly impacts your car insurance rate. Good credit can help you secure lower premiums, as insurers often view drivers with excellent credit as less risky, leading to better rates.?

While lowering your coverage can lower your rate, doing so is not recommended. If you cause an accident and your policy limits do not cover all the damage, you are responsible for the rest of the expenses.

Additionally, having uninsured motorist (UM) coverage provides financial protection if you're involved in an accident with a driver who doesn't have insurance. It covers medical expenses and vehicle repairs, saving you from significant out-of-pocket expenses. As is the case with liability coverage, it is strongly recommended that you have more than the minimum UM coverage.?

Final Thoughts

It is no secret that car insurance in California is getting more expensive. This is especially true for parents of teens who are getting their own cars for the first time. For one parent, that meant a car insurance premium increasing from $1,700 to $5,000.?

But forgoing insurance and driving without car insurance isn’t an option. If you are caught driving without insurance in California, you could face steep fines, license suspension, or vehicle impoundment.?

Ensuring proper coverage not only keeps you legally compliant but also protects you on the road and your peace of mind.?