What Made Your Car Insurance Rates Go Up

Budgeting is a must-have skill, but life loves to throw curveballs — especially when it comes to finances! Like many others, you must have budgeted carefully for your car insurance renewal, only to be hit with an unexpected price increase. Here’s the thing: car insurance quotes in Saudi Arabia (and everywhere else) aren’t set in stone. Several factors can nudge the final price up or down; so it can be hard to get to the bottom of this increase. We’ve all been there, so let’s break down what might be driving up your comprehensive car insurance cost and wrecking your budget!

Why did my car insurance go up?

Oftentimes, there are obvious reasons and common explanations behind your car insurance rates going up. In most cases, you can control the pricing factors especially if they’re related to your driving record, such as:

Car Accidents

Typically, insurance companies weigh your driving history and driving habits heavily when calculating your rates. As a result, most people know that they’ll find themselves paying significantly higher car insurance rates after being involved in car accidents. On the flip side, SAMA instructed insurance companies to recognize careful drivers and qualify them for No Claim Discount as a reward for having a clean driving record. Moreover, No Claims Discount NCD aims to encourage more drivers to adopt safe driving habits and consequently reduce accidents rates and economic losses.

Getting Traffic Violations

Similarly, insurance companies consider traffic violations and tickets on your driving record a red flag.

Especially, when you have numerous or serious driving misadventures on your record such as speeding and overriding a red light. According to statistics, speed is a key risk factor in accidents; because speed will increase both the reaction distance, as well as the braking distance.

Filing a Comprehensive Claim

Usually, your insurance provider won’t fork out any money when the other driver is 100% liable for the accident. This is because the other driver insurer will pay for repairing any damage and your medical expenses, if necessary. But, if you’re wondering: Will My Car Insurance Cover a Hit & Run in Saudi? The answer is yes- but unfortunately, this claim might lead your rate to increase.

Business Use of a Personal Car

Side hustles such as offering rides or delivering food and groceries have grown in popularity as a good way to make extra money. If you’re thinking about driving for Uber, Marsool, or a similar service in Saudi, it’s important to know that business use could affect your car insurance.

Overall, insurers need to know all the risks they could potentially be exposed to; So, they can calculate your level of risk and price your policy accordingly. In the eyes of insurers, ridesharing, and delivery present a big one. Since you will be driving more often, this also means you’re more likely to file a claim later. As a result, your side gig could increase your insurance premiums.

Losing Car Insurance Discounts

On average, Car insurance discounts in Saudi range from 10%-20% but they can save you a lot of money in the long run. In theory, most drivers are eligible for:

• No claim discount – Lost once you file for a claim.
• Loyalty discount – Lost once you switch your car insurance provider.

Worry not! There are still many ways to get the best insurance offers, all you have to do is compare car insurance prices online.

Change of National Address

That’s right! This could be the last thing on your mind, but moving may have another impact on your life you weren’t thinking about. A change in your national address could impact how much you pay for your car insurance.

In a nutshell, your national address is one of the many factors that insurance companies use to determine rates. Accordingly, a change of address can also mean a change in your level of risk; as a result, your new national address can either raise or lower your car insurance depending on where you move.

For example, if you move from a quiet area to a bigger and busier city like Riyadh, generally your car insurance may be more expensive than others.

Don’t panic! It’s not always your fault.

On other occasions, your car insurance rates could increase (or even decrease!) for reasons beyond your control. Here’s what might be driving up your car insurance rates, even if you’re a great driver:

• Accidents cost everyone: More accidents on the road generally mean higher insurance rates for everyone in Saudi. Blame those potholes and rough roads too, they lead to more accidents and injuries!
• Repair bills on the rise: When the cost of parts and repairs goes up, so does the cost to insure your car. It’s a no brainer!
• Diya (blood money) matters: Increases in blood money payouts can lead to losses for insurance companies, which can also get passed on to you.
• Fraudulent claims: The rate of car insurance fraud in Saudi Arabia is up to 15-20%, which is higher than the global average of between 9 to 10%. While Najm is taking serious measures to fight back against this, it can still affect insurance rates for everyone in Saudi.
• Uninsured drivers hurt everyone: The more uninsured cars on the road, the higher the risk for everyone. All insurance experts agree that insuring all cars in Saudi Arabia would contribute to reducing insurance rates by 50%.
• Less safe cars, higher rates: If your car’s make and model has a spike in claims, your insurance company might consider it less safe and therefore you’d see a spike in your insurance costs.
• Add-ons add cash: Bear in mind that adding extra coverage (like an additional driver) to your standard comprehensive insurance policy will also increase the cost.

If your car insurance feels a bit pricier, don’t skip price comparison

All in all, car insurance prices are always subject to Insurance Authority supervision. However, once you familiarize yourself with the pricing factors and how insurance works, you will be able to get the best car insurance for the best price. Also, you can maximize your opportunities to save more on car insurance if you compare car insurance rates from multiple companies online.