Why Does My Car Insurance Get More Expensive Even Without a Claim?

And frustratingly, your premium is not priced only on you. Insurers also adjust rates based on what it’s costing them to pay claims across your state, your ZIP code, and even your vehicle type. When those underlying costs climb, a clean record doesn’t always protect your wallet.

According to data from Experian, the average annual cost of auto insurance premiums increased by about 11% for minimum coverage and 29% for full coverage policies between June 2023 and June 2025.

Filing a claim with your auto insurance can cause your rates to increase, as the insurer now considers you a higher risk. But even if you don’t get into any accident or submit a claim, you may end up paying more anyway.

Why Do Car Insurance Rates Rise Without a Claim?

There are many reasons that your premiums may increase even without a claim on your record:

Rising Cost of Vehicle Repairs

The cost to repair vehicles is rising, and insurers are passing the expense of bigger claims payouts on to drivers. The reasons for increased repair costs include:

• Advanced technology. Modern cars have complex parts and systems, including computers, sensors, and cameras, that are more expensive to repair than older vehicles.

• Supply chain issues. Some vehicles contain parts that are difficult to source or must be imported from overseas, driving up costs for mechanics and insurers.

• Rising labor costs. A shortage of mechanics and technicians has pushed wages higher, translating to higher service and repair bills.

• General inflation. Just like many goods and services, auto repair expenses have risen because of inflation and economic pressures.

“Many modern vehicles include a great deal of advanced technology, such as sophisticated electronic systems … Additionally, many parts for these systems (and other parts) are becoming more difficult to obtain and are therefore more expensive,” says Rami Sneineh, a licensed insurance producer and the vice president of auto insurance broker Insurance Navy.

Rising Medical Costs

Inflation, product shortages, and supply chain issues have significantly inflated the cost of many medical-related goods and services. The healthcare industry’s staffing shortages also drove up labor costs, and all these factors increased medical bills and contributed to higher claims payouts from insurers.

“Medical costs associated with accident-related injuries are high and are typically paid by automobile insurance companies. As the cost of medical care continues to increase, the cost of paying for injury claims also goes up,” explains Sneineh.

Increasing Severity and Frequency of Accidents

“The frequency of claims is going up, and the severity of claims is going up, too. More people are causing damage to other vehicles while operating their vehicles recklessly. This causes more severe and costly accidents. In turn, when insurance companies pay out on these expensive claims, they increase rates to help cover the higher payouts,” Sneiheh adds.

According to data from LexisNexis® Risk Solutions’s 2025 U.S. Auto Insurance Trends Report, driving violations have increased 17% year over year, and claims severity has also risen in recent years. When claims occur more frequently and are more severe, the ensuing higher risk for insurers can lead to higher premiums.

Environmental and Geographic Risks

Extreme weather such as hurricanes, floods, and wildfires can damage and destroy vehicles or create hazardous conditions that lead to car accidents, and climate change is increasing the frequency of these events. According to data from the National Oceanic and Atmospheric Administration (NOAA), between 1980 and 2024, the average number of disaster events causing over $1 billion in losses was nine; but the average between 2020 and 2024 is 23, more than double.

The severity of weather events is also increasing. According to data from NASA, extreme weather events such as floods are becoming more frequent, longer-lasting, and more severe. If you live in an area that insurers deem at risk for weather events, you may see higher premiums, even if you haven’t personally filed a claim.

Coverage and Policy Changes

Certain coverage changes will increase your premium, sometimes immediately. For example, increasing your coverage limits will naturally raise the cost of your policy. If you add optional protections, like roadside assistance or rental car reimbursement, you will need to pay extra for those. And if you decide to lower your deductible, your premiums will increase.

Life Changes

Some life changes may cause your car insurance rates to go up:

• Moving to a new area. If you move to a different zip code with a higher risk for weather events, higher crime rates, or more congested roads, your insurer may raise your premiums to account for the added risk.

• Adding new drivers to your policy. Adding another driver to your policy can get expensive, especially if they’re a new driver. According to the Insurance Information Institute, adding a teenager to your policy can increase your premiums by 50% to 100%.

• Buying a new vehicle. If you buy a new car, especially if it’s expensive or considered riskier by insurers, you will likely see higher rates than you would when insuring an older or less risky vehicle.

How to Keep Your Car Insurance Costs Low

While there isn’t much you can do about many of the factors causing insurance rates to rise, there are some proactive steps you can take to help keep your policy more affordable:

Shop around before your policy renews

If you’re unhappy with your current insurer’s rates, shop around to compare quotes from multiple insurers before your policy renews. It’s a good idea to get quotes from at least three insurers for the same level of coverage and the same deductible to ensure you’re getting an accurate comparison. Make sure you start rate shopping early enough to switch providers before your policy renews.

Increase your deductible

The deductible is the money you have to pay from your own pocket when you submit a claim, with your insurer covering any repair costs exceeding that amount. The higher your deductible, the cheaper your insurance (though you’ll have to pay more for repairs yourself). You can call your insurer to explore the potential savings of adjusting your deductible.

Drop collision and comprehensive coverage for older vehicles

Car insurance offers multiple coverage levels, and full coverage often isn’t worth keeping on older or lower-value cars. Specifically, you may want to drop collision coverage, which covers vehicle damage regardless of who is at fault, and comprehensive coverage, which covers vehicle damage from non-collisions, in the following scenarios:

• Your car is only valued at a few thousand dollars or is only worth a little more than your policy’s deductible.

• You have enough savings to cover a replacement car or a down payment, and you have enough income to cover a car payment.

• You don’t drive your vehicle very often, or you tend to only drive short distances.

Get usage-based insurance

Some auto insurers offer usage-based insurance programs, which set your premiums based on your driving. There are two main types of usage-based insurance:

• Pay-per-mile. Some insurers offer programs that track the mileage you put on your car and charge a per-mile rate, on top of a flat coverage rate. This is a good option if you don’t put a lot of miles on your car.

• Usage-based. More comprehensive usage-based programs look at your overall driving behavior, including mileage, driving habits, location, and more. This can be a good option if you drive safely, avoid congested roads, and are considered a lower-risk driver.

These programs may not save you any money if you drive often, travel on busy roads, drive recklessly, or engage in other risky behaviors.

Improve your credit score

Some states allow insurers to use a driver’s credit-based insurance score to set prices. Your credit-based insurance score is based on the information in your credit report (but is different from your traditional credit score). In states where credit-based insurance scores are used, improving your credit score could help you lower your rates.

Look for other discounts

“Do not forget to inquire about possible safe driver discounts, good student discounts, or discounts for paying your premium in full, as these can result in some savings,” encourages Sneineh. Common discounts offered by auto insurers include:

• Policy bundling. If your insurer offers other types of insurance like life insurance or homeowners insurance, buying a policy and bundling it with your car insurance may provide significant savings.

• Automatic payments. Your insurer may offer you a discount when you set your policy to automatically debit your bank account, instead of manually scheduling payments.

• Annual payments. If you pay for an entire year of coverage up front, you might see some savings compared to paying on a monthly, quarterly, or biannual basis.

• Paperless billing. Some insurers will knock a small percentage off your bill when you go paperless and handle all your business online or over the phone.

• Safe driving. You may earn a discount by maintaining a safe driving record for a certain amount of time, or by taking a defensive driving course.

• Military or student discounts. If you’re in the military or a student enrolled in an eligible university, you may qualify for a discount. Make sure you’re aware of the discount requirements – for example, some insurers require that students maintain a certain GPA.

• Senior drivers. There are plenty of ways to save for your change in lifestyle and driving after retirement.

Conclusion

Car insurance prices are rising, even for drivers with no history of claims, for a number of reasons. To keep your costs low, shop around for affordable coverage, consider policy adjustments like lowering your deductible, dropping full coverage for older vehicles, and seeking out every discount. Taking steps to reduce your premiums now can help you fight the rising tide of car insurance rates.

Frequently Asked Questions

1. Can my car insurance go up at renewal even with no claims?

Yes. Many insurers re-rate policies at renewal using updated claim costs, risk data, and local trends, which can raise premiums.

2. Will my credit affect my car insurance rate?

In many states, insurers may use a credit-based insurance score when pricing. However, some states restrict or ban this practice.

3. How often should I shop around for car insurance?

At least once a year, and especially 3 to 4 weeks before renewal. Comparing quotes can reveal better pricing for the same coverage.

4. Why did my rate change if I didn’t change anything?

Sometimes you didn’t, but your area did: higher repair costs, more thefts, more severe accidents, or weather losses can raise rates broadly.