Why Did My Car Insurance Premium Increase with USAA?

Getting an auto insurance premium increase can be frustrating. You may wonder why your rates went up, especially if you have a good driving record and haven’t filed any claims. If you’re a USAA member, here are some common reasons your car insurance may have increased and what you can do about it.

Typical Reasons for Auto Insurance Increases

There are a variety of factors that play into how your car insurance premium is calculated. If any of these change, it can result in a rate increase. Common reasons for higher auto insurance costs include:

• Your personal risk factors changed – Things like getting married, moving to a new area, having teenagers start driving, or getting a ticket can increase your risk profile. Insurance companies reevaluate your details every 6-12 months when your policy renews.

• You had a claim – Filing an auto insurance claim often leads to increased premiums. After a claim, insurers see you as more likely to file again. Multiple claims can really boost your rates.

• Your vehicle changed – Upgrading to a newer, more expensive car or adding a teen driver to your policy are typical ways your auto insurance costs can rise. Some vehicles also have higher insurance rates due to repair costs, theft rates, accident frequency, etc.

• You let your coverage lapse – If you have a gap in auto insurance coverage, insurance companies will view you as higher risk and charge more when you restart a policy. This can last 3-5 years.

• Overall inflation – The costs of vehicle repairs, medical care, and vehicle replacements are rising. Insurance companies have to charge customers more over time to keep pace with increasing costs.

• Insurance company expenses went up – Things like overhead, lawsuits, and claims processing expenses may lead an insurer to increase customer premiums to maintain profit margins.

• Rate increases across the board – Insurance companies review their fiscal health periodically and may decide rate hikes are needed for certain tiers of customers or coverage types across an entire state or region.

• You moved to a pricier area – Auto insurance rates vary by location. Moving to a region with higher accident rates, costlier vehicle repairs, increased vandalism/theft, or more natural disasters will likely boost your premium.

• Poor credit history – Having a lower credit score can signal you’re higher risk, prompting insurers to charge more. Some states allow this.

• Higher state insurance minimums – If your state mandated higher liability coverage minimums, companies have to charge customers more to meet the new requirements.

• You reduced your deductible – Opting for a lower deductible means the insurer has to cover more per claim. This results in a higher premium.

• Market trends – Auto insurers use complex algorithms and analysis to determine insurance rates based on market trends, projected losses, and various risk factors. These can change over time.

Why Did My USAA Premium Increase Specifically?

USAA is known for having some of the lowest auto insurance rates around. But as a member-owned company, they still have to occasionally raise rates across the board or on specific customers to maintain strong fiscal margins.

Some common reasons USAA members could see a car insurance premium increase when renewing their policy are:

• You had an at-fault accident or filed a claim – USAA may raise your rates 10% or more. Multiple claims can increase this further.

• You received a traffic citation – Particularly serious infractions like DUI or reckless driving can significantly impact your USAA premium.

• You relocated to a higher-risk area – Moving to a area with more uninsured motorists or accident frequency could boost your rate.

• You increased your coverage – Upgrading your liability limits or reducing your deductible typically comes with a higher premium.

• Your teen started driving – Adding a young driver under age 25 can increase your USAA policy premium substantially.

• You bought a new vehicle – Some makes/models have higher associated rates to insure due to repair costs, accident rates, etc.

• You lapsed your USAA coverage – Letting your auto insurance policy cancel for non-payment will cause USAA to re-rate your policy when you restart coverage.

• You turned 25 – USAA members under 25 get lower rates. At 25 rates often increase but should level out again until you turn 55.

• Your credit score dropped – USAA may use your credit-based insurance score as a rating factor when determining your premium.

• You customized your vehicle – Adding aftermarket modifications like a new stereo system, rims, lift kit, etc may cause your rate to go up.

• Higher state minimums – If your state required policyholders to increase liability limits, USAA has to raise customer premiums.

• General rate increase – Like all insurers, USAA reviews their auto insurance rates yearly and may make broad increases across members.

What to Do if Your USAA Premium Increased

Don’t panic if you get your USAA auto insurance renewal notice and see an unexpected rate hike. Here are some smart steps you can take to try to lower your premium again:

• Review the details – Your renewal notice should list factors that contributed to the increased rate. Ensure it’s accurate. Report any errors immediately.

• Take a defensive driving course – Completing an approved course can make you eligible for a discount. Some USAA members see 10% or more off their premium.

• Raise your deductible – Opting for a higher deductible like $500 or $1,000 can reduce your rate, just be sure you have savings to cover it if needed.

• Modify your vehicle – Removing aftermarket additions like a loud stereo system that you added after initially insuring your vehicle may help lower your premium.

• Check your credit report – Errors on your credit report can impact your score and insurance rate negatively. Dispute any inaccuracies.

• Ask about discounts – Make sure you’re getting all the discounts you’re eligible for with USAA like multi-vehicle, safe driver, loyalty, etc.

• Drop unnecessary coverage – Eliminating collision or comprehensive coverage on an older car may be a viable way to reduce your overall premium.

• Increase your liability limits – Raising your liability coverage limits can sometimes actually decrease your rate on a USAA policy. Discuss options with your agent.

• Bundle home and auto – Having homeowners or renters insurance too can give you a significant multi-policy discount from USAA.

• Compare rates – It never hurts to compare quotes from other top insurers alongside your USAA renewal to see if you can find a lower rate.

• Call USAA – Talking to a USAA agent directly can help you understand exactly why your premium went up and what can be done to reduce it.

The good news is USAA members have options even in the face of a premium increase. With a combination of adjustments to your policy and being an informed and proactive consumer, you can likely find ways to lower your auto insurance costs again.