Here's Why Your Car Insurance Rate Changed

If you've ever opened an insurance renewal letter and been, well, confused -- you are definitely not alone. Car insurance rates fluctuate. So it's time to pop the hood on this rate thing and take a look. Here are the big reasons your price fluctuates:

Changes on your end.

There's a long list of changes you make which can affect the price you pay for car insurance. And they all pretty much make sense, when you think about it. Here are a few:

1. You moved. Where you live is a pretty good indicator of where you drive, and certain areas present more risk than other areas. If you move to a place where there are more car accidents, you'll generally pay a higher rate. Pretty straightforward.

2. Your driving record changed. At Root, your driving score is the number one factor in the price you pay for car insurance. But it would be pretty silly of them to completely ignore driving history. And if you get in an accident and collect three speeding tickets in six months, well... no insurance company could look away from that. It wouldn't be fair or responsible.

3. You added, removed, or changed a vehicle on your policy. Quick quiz: which of the following vehicles costs more to replace?

A: 1987 Ford Focus, rusty around the rims
B: 2018 Ferrari, shiny and fresh from the dealership

Yeah, it's a silly question. But it illustrates an important point: different vehicles cost different amounts of money to replace or repair. If you change your vehicle lineup on your policy, the price of your insurance will almost certainly be affected.

(Shopping around for cars? If you're a Root member, the app makes it simple to check in real time how your rate will be affected by a different vehicle -- before you purchase. Pretty nice.)

4. You changed the drivers on your policy. This one is obvious. The more people on your policy, the more money you will pay to cover everyone. This is a good place to note, though, that the other people on your policy can affect your rate in other ways. (If your sixteen-year-old son got two speeding tickets -- yeah, you'll probably see that in your insurance renewal rate.)

Changes around you.

You've probably noticed that the world never stays the same. And all those changes -- like the changes in the market -- can have a significant effect on your car insurance rate. Here's a closer look at some of those factors.

1. The amount of accidents around you goes up or down. Even if you're the best driver in the world, someone can crash into you. Even if you're the most trustworthy person in the world, someone could steal your car. And if the rates for accident and theft go up or down in your area, your insurance rates will go up or down, too.

2. The weather around you changes. Weather and natural disaster risk changes over time. And if your insurance company expects that it will have to pay for a lot of flood damage in the near future, you can definitely expect your rates to go up. (Yea, bummer.)

3. The cars around you get more or less expensive to repair. While having safer, energy-efficient cars on the road is mostly a good thing, the unfortunate side is that those cars are generally more expensive to repair -- and the added expense can drive up your insurance rate.

Changes on the insurance company's end.

Running an insurance company sustainably is a tricky job. Insurance companies must collect enough money from policies to cover the cost of claims and the cost of running a business, without setting prices too high. It gets even more complicated for Root, because they're also committed to fairness -- the best rates for the best drivers. Root's dedicated to giving their good drivers the lowest rates possible.

But to do that well, Root has to keep a sharp eye on their data and how their models perform over time. Root's actuaries (the people who do tricky insurance calculations) are knee-deep in the numbers every day, creating, checking, and double-checking their actuarial tables. If they see areas where a prediction doesn't quite align with reality, they adjust the price up or down. It's as simple as that.

It's also normal. Insurance risk is a constantly evolving calculation with many, many factors, which is why insurance rates are never permanent. Your rate will fluctuate for as long as you have insurance. Sometimes those fluctuations will be big. Other times, you won't even notice.

The important thing to note here is that car insurance rate changes happen, they happen constantly, and they happen for a reason.

But not all companies lower rates when predictions are overpriced.

Root is 100 percent committed to bringing you the fairest rates possible.
Root was founded on the relentless pursuit of fairness. That means they will stop at nothing to ensure their rates are the most accurate in the business and that you'll have the lowest price they can sustainably offer. That doesn't mean your rate will never change -- that's not how insurance works -- but it does mean that it will never change without cause.

Not a Root member? You're missing out! Download Root to get started.

DISCLAIMER FOR QUOTES: ROOT INSURANCE CO. RESERVES THE RIGHT TO REFUSE TO QUOTE ANY INDIVIDUAL A PREMIUM RATE FOR THE INSURANCE ADVERTISED HEREIN.
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This story is part of our special report: "Fair Car Insurance sponsored by Root". Want to read more? Here's the full list.