10 Personal Factors Affecting Auto Insurance Prices

Quite a few things that affect auto insurance premiums are personal. Your choices and changes in life determine how much you need to pay and what type of coverage you should have. Therefore, you have a lot of control over the costs. A few small adjustments can save you a lot of money. Here are some of the personal factors and what you can do about them to reduce premium and improve policy coverage.

  1. Driving History

More than anything else most vehicle insurance companies look at the driving records of applicants. No matter what the other indicators your driving record is a clear proof. If you have a speeding ticket in your driving license records, this is a clear indication that you like speed which could cause you to have an accident one of those days. This information is readily available to companies who check DMV driver license records.

You can save you as much as 40% on premiums by keeping a clean driving history without traffic moving violations. To achieve this, you need to be mindful of the rules and regulations in your state. Watch out for speed and red light cameras and watch your speed. Don’t drive when you are intoxicated under any circumstance.

  1. Credit Records

Companies are now looking to other risk indicators that may have nothing to do with driving. They develop insurance credit rating calculations to figure out the likelihood of claims by looking at how you handle your financial affairs. There is overwhelming evidence that there is a correlation between claims and credit score and most states accept this fact.

You can save as much as 25% by having a good credit score. So, looking after your financial affairs is more influential on car insurance prices now. Not only you increase your chances of finding low interest credit facilities like mortgages and auto loans but also you are rewarded by auto insurers with premium discounts.

  1. Family

Your family circumstances cannot be ignored when calculating premiums. If you are married you have various alternatives as to how you can arrange your policies. A single person has only himself/herself to consider. Your spouse’s driving history will affect the rates offered to you. Most companies would want to know about everyone who is at driving age and live in your household.

Also your children or parents will be influential in your premiums. Parents would want to include their teenage children on their policies that make their premium much higher. When they live home or buy their own cars and insurance you can take them off your policy and get a large relief. Children can be insured by their parents at more agreeable rates. Also, many companies would offer discounts to children of their current policyholders when they buy their own policies while they are still living with the parents.

Families are encouraged to look at their options carefully when they are insuring their vehicles. They can save considerable amount of dollars by buying multi-car insurance policies or multiple policies from the same insurer including home insurance. Furthermore, you may have an option to exclude a family member with bad driving records from your policy and stop their influence on costs. Your state must allow this arrangement. Also, most companies would only exclude a driver in your household if they have their own cars and insurance policies.

  1. Education, Profession and Membership Discounts

There are companies that offer discounts based on your education or profession. Engineers, fire-fighters, army personnel and academic teaching jobs are some of the professions that qualify you for discounts. Some companies offer discounts while you are at the university and after graduation. Failing all these, you may be qualified for around 10% discounts by buying roadside recovery coverage from one of the main independent providers like AAA.

  1. Home Ownership

There is no secret that companies like motorists with home-ownership, married and well educated. Many companies would offer you and your spouse discounts if you own your own home (jointly or by one of you). You can get further discounts by combining your home and auto insurance. Also, you would probably need good level of liabilities coverage when you have assets that will encourage third parties to sue you after an accident you are at fault.

  1. Vehicle Ownership

The automobiles you own are one of the main premium determination factors. If you own a vehicle that is considered safe and secure you are likely to be offered low rates. Insurance companies like anything that will reduce their risks. Good cars do exactly that by reducing injuries to passengers and deterring auto thieves.

On the other hand, if you like flashy and fast cars you may have to pay more to insure them. Most companies offer large discounts for second cars that are used rarely. Classic cars are good examples but discounts are not limited to them. For example, you may be able to insure an older car that is kept as a backup at reasonable cost. You can only drive one car at a time, right?

You really can save a lot of money by paying a little attention to the car you are going to buy. This is especially true when you are insuring a young driver. They are already considered high risk. You can exasperate the costs by buying a sports car for a youngster. Don’t do it if you have already got money problems.

  1. Driving Profile

How you use your automobiles affect your rates. If you are mainly taking public transport to work and your car sitting at home, you are working from home or you are a home maker talk to your insurer. As a general rule, motorists who drive low miles every year get lower rates. Another good example is retired people who don’t have to commute to work anymore.

  1. Zip Code

If you noticed, the first thing they ask on an auto insurance quote form is your zip code. Your rates have to be adjusted based on where you live. Generally, people who live in city centers, high vehicle crime areas, natural disaster zones, high congestion and traffic accident locations pay higher premiums. So, where you set your home can increase or decrease your rates as much as 100%.

Parking facilities at your home can qualify you for discounts too. When a car is parked in a garage overnight the risks of theft, vandalism and other damages to it is lower. Off street parking facilities may be good enough to get you some discounts as well.

  1. Basic Personal Information

Your age is a very important factor in determining how much you would be charged. For example, If you are a young driver you will probably be charged high premiums due to your youth. Your gender is taken into account as well. For example, ladies can get cheaper rates compared to male drivers. However, there is not much you could do about it. Hence they are left to the end. Perhaps, you could stay on your parents’ policy as long as possible.

Maybe, you could arrange to insure your automobile with an older relative to save some money. But not many people have a spare relative waiting to be used for insurance purposes. Besides, there are limitations like your aunt must have the share of vehicle ownership if you want her name on the policy as insured. Also, she would be liable for accidents that you caused. It is not an easy one.

  1. Personal Preferences

It is not a direct factor like others above but your preferences affect how much coverage you would buy and what premium you would pay. For example, if you are a risk averse person you would want to buy as much coverage as you want and keep the deductibles as low as practical. In the opposite case, you may keep the costs low by dropping some of the coverage that are not going to cause you a financial ruin or keep higher deductibles.

Being aware of your choices and their effects can result in good and cheap auto insurance coverage. Keep these points in mind and see if they can help you in the short or long terms.

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