An increase in car insurance charges

[Qqueen]

When I took up car insurance 3 months ago, I was only paying $100 per month. I am 25 years old and I have a clean driving record and no history of claims with the company. This month, I just found out that my monthly bill was increased to $120. Are insurance companies allowed to do this to their clients or is it illegal?

[disneysteve]

Why would it be illegal to raise the rates?

I do find it odd that the rate would increase after only 3 months. I pay my premium every 6 months so the rate couldn't change during that time. Have you called to ask about it?

I would also take some time to shop around. You might find a better rate elsewhere.

[Joe Moore]

The rates should not change mid term without a good reason or changes in your circumstances like changing your address, job or car. If you have taken a 6 months policy it is a deal for 6 months. This is different for the new customers in some states.

Usually, companies are allowed to change their minds within the 60 days of signing a new customer.

There could be several reasons why they would increase your premium. First of all they may have found something like a traffic ticket on your driving record that you did not disclose when you get a quote. The other reason may be that your credit score is worse than you indicated. You can read more on this here.

The best thing to do is to call them and ask. They will have to give you an explanation. If you are not satisfied with it you can look at your alternatives by getting alternative quotes.