What Made Your Car Insurance Rates Go Up

Budgeting is a crucial skill for effectively managing your finances. Life is full of unexpected surprises, some pleasant and others not so much. Unfortunately, it often feels like these surprises only occur at the most inconvenient times. Imagine trying to renew your car insurance, only to be hit with a sudden increase in premiums that throws your entire budget off balance. If you’re wondering why your car insurance rates have unexpectedly gone up, it’s important to remember that the price you pay for car insurance is determined by various factors, including risk, that impact the cost in Saudi Arabia.

Below, we’ll explain in detail what caused your car insurance rates to go up all of a sudden. So, read on!

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.

Other Factors that Determine Your Rates

On other occasions, your car insurance rates could increase (or even decrease!) for reasons beyond your control, such as:

1. First and foremost, high accident rates equal high insurance rates in general.
2. When the cost of spare parts and repair workshops go up, expect your car insurance rates to do the same.  
3. Also, you can blame it on potholes and poor road conditions because they cause many injuries and accidents.
4. Moreover, increasing the value of (Diya) i.e blood money; In fact, raising blood money incurs various losses for insurance companies
5. Another reason is insurance fraud. 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%. Therefore, Najm is deploying Artificial Intelligence to detect & deter fraud cases.
6. Additionally, the number of uninsured cars can affect everyone – as the head of “Najm” explained that insuring all cars in Saudi Arabia would contribute to reducing insurance rates by 50%.
7. Finally, your insurance company may re-evaluate your car’s make and model when there’s a spike in claims. This could mean your car might not be safe it is less safe and more likely to cause harm or injury.

Of course, you should also note that all additional covers and add-ons cost extra cash.

All in all, car insurance prices are always subject to SAMA’s 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.