Fluctuations of home and auto insurance rates are due to numerous factors, and understanding them can help you prepare for rate increases down the road, or—potentially—even aid you in avoiding them.  

What’s Causing Rates to Fluctuate?

Factors affecting auto insurance rates include increased repair costs from new technology, greater numbers of cars on the road, and accidents caused by distracted driving.  

Some factors affecting home rates include larger homes, storms creating more damage than usual, and rising costs for materials and labor to repair homes.  

New Cars

Because a new car is worth more than an older model, it costs more to replace. And if you finance or lease your new car, most lenders require you to carry full coverage—which makes it impossible to skimp or strategize coverage. You can be wise about how your new car will impact insurance premiums before you buy. According to insure.com, the cheapest new cars to insure tend to be larger, sturdy models such as minivans, SUVs and trucks. 

Long Commutes

Long commutes don’t just cost you time and fuel; they also boost your auto insurance premiums. And if you’re in a profession that involves frequent driving—like sales—you’ll pay for the increased time spent in the car, because more time spent driving increases the risk of accident.

Location, Location, Location

Actual risk is determined by the zip code you live in, and city dwellers tend to have more accidents, which drives their premiums higher than those in less populated areas. 

Marital Status and Age

If you’re unmarried and without children, you’re considered part of a higher-risk category than married couples with kids (married people tend to stay home more). If you’re under 26 and male, you’ll pay even more.

Lapses in Coverage

Not having any auto insurance, even for just over 30 days, can cause your premiums to spike.

Driving Record

Just as having no accidents or tickets will lower your auto insurance premiums and, having either or both could raise them. Most insurance companies periodically scan for recent traffic violations, whether you’re a new or existing customer. If your insurer finds a violation, your auto insurance rates could be higher for the next few years.

What To Do About It

So, what can you do to reduce your insurance rates?  Periodically evaluate how much coverage you actually need.  Then take a look at deductibles. Increasing auto and home deductibles can reduce your monthly premium. Your insurance agent can review your policies and help find ways to reduce your premium.  

Discounts, Risk, and Loyalty

Most insurance companies offer discounts for good grades, away discounts for college students, and low-mileage discounts for occasional drivers. So, as your life circumstances change, ask your agent if you qualify for any new discounts.  

Avoiding risks can also help keep rates in check. Certain home purchases, such as trampolines, can increase your home insurance rates or even make you ineligible for insurance with some carriers.  

Finally, loyalty and safety are key. Insurance companies reward client loyalty and safe driving with additional coverage options such as second chances for accidents and deductible dividends. Switching insurance carriers frequently can offer small immediate savings, but is not a wise move long term, as it restricts you from accruing valuable loyalty credits.  

The Bottom Line

When it comes to insurance rates, some factors are out of your control. But understanding those factors that are within your control—such as car type/model, home size, location, amenities, deductibles and discounts, can help you play an active role in keeping rates down.  

We welcome your insurance-related questions. Contact the independent insurance agents at Forest Agency at 708-383-9000 and info@forestagency.com, or visit us online at www.forestagency.comto learn more about the best fit coverage for your home, auto, life, and business.


Dan Browne is the President of Forest Agency Insurance, a proudly-independent insurance agency serving Oak Park and the surrounding communities since 1957.