10 Factors that Affect Car Insurance Rates

If you want to save on premiums you’d better pay close attention to factors that affect auto insurance costs and see if you can turn them around to help you. A quote is a simple number. However, there are many details considered and complicated calculations carried out before arriving to those numbers. This post discusses 10 key vehicle insurance factors and how you can improve on them. If you can tweak only few of them and manage to reduce the rates you can see considerable difference in the final price.

  1. What You Drive

Everything begins with buying a car and that is when you would start worrying about costs. Choosing an expensive to insure auto can easily result in twice higher rates. There are many reasons as to why certain automobiles can be costlier to cover. Every vehicle has its own risk rating that tells you how expensive or cheap it would be. So, you should always check it before investing on them.

The obvious reason is that statistically they are involved in more accidents and cause plenty damages in them. In the same way, certain types of cars are known to cause fewer accidents, less injury and not stolen very often and that is why carriers don’t charge much for them.

  1. Coverage and Deductibles

This is self-explanatory. The more protection you want the higher premium you pay. However, you shouldn’t make the mistake of paying too much attention to it at the beginning because this may lead to underinsuring. Initially, don’t worry much about the costs and concentrate on getting the cheapest quotes by searching through several sources and companies. Many people manage to get a full coverage policy that is cheaper than a liability only by simply following this single and probably the most powerful advice we can give you.

This doesn’t mean that you should keep loading it up with covers that are neither affordable nor essential. Generally, you will get the best value if you buy a cheap standard full coverage. When you start adding special conditions and endorsements on policies prices can start getting expensive pretty quickly.

Probably you should be more accommodating when it comes to deductibles by accepting higher figures. A few companies like to push up the deductibles in an effort to cut out small claims and they offer cheaper quotes in return. In other words, higher deductibles would usually mean lower car insurance costs per month.

  1. Driving Records

There are three main components to records. The first one is the length of time since you passed the license test. This is the measure of experience. Secondly, recent accidents are pretty good indicators of future claims and they mostly look at last 3 years of history. You can get about a 20 – 30% discount from most of them. As a general rule, motorists who are in the habit of causing accidents must pay higher premiums than careful ones.

The third record component is traffic tickets. Surely, certain moving violations like a DUI can cause a huge dent on it. Most states have different points for each type of tickets and when you reach certain number you lose the license. In that case, you don’t need to worry about coverage until you get it back. Then, you will see huge spike on rates and you will probably need SR 22 certificate for a few years too. So, try to avoid points on license.

  1. Credit History

Most automobile insurers in nearly all states check the credit score before they confirm the final premium. It is largely believed that people with poor score are more likely to make claims. People with good credit aren’t keen on making them, especially when the losses are small. That is why they are prepared to offer as much as a 20% discount for good credit (similar amount as no claim). That is why you should look into improving credit score if you want to enjoy great prices.

  1. Where You Live

Where you live affects auto insurance rates in two ways. First of all, a zip code contains so many details pertaining to demographics of a neighborhood. One of the most influential factors is state laws, regulations and minimum liability requirements since each has own rules. For example, the same driver may have to pay twice higher premium for living in New Jersey in comparison to New Hampshire.

Secondly, living in own home may enable you to get homeowners car insurance discount, which is not available to renters. They usually ask but you should always mention if you own it. You can see if they would offer further price cuts if you agree to bring home coverage over to them or vice versa.

  1. Vehicle Use

Needing a car for a daily commute or long trips across state lines would mean that yearly mileage is going to be affected by those commutes and trips. Generally, the longer you travel the more you pay. You should inform them if you are retired, taking public transportation to work or driving less than usual for whatever reason because there is a high chance you can save money.

  1. Age and Gender

Naturally, there aren’t many discounts a teenager can get. By definition, they don’t have much driving or even credit history. They are inexperienced and susceptible to making wrong decisions. As you pass these difficult years gaining experience along the way you start getting better rates.

Gender is another automobile insurance factor that is well known. Ladies usually get lower quotes, especially in the early years. Having a female partner as the lead on a joint policy may be influential.

  1. Other Drivers on the Policy

In most cases, you will need to include people living in your house as listed drivers. You may be able to specially exclude them if they have own vehicle and policy. If you want allow others occasionally use the car you may pay for it knowingly or unknowingly. Some companies allow policyholders limit the drivers to only the listed ones in return for lower vehicle insurance rates. This is especially effective if you own a sports car.

  1. Marital Status

Being married can be beneficial in this regard too as many underwriters offer better prices to married people. They are considered to be more responsible in comparison with single drivers. They are careful because they feel other people depend on them. So, be sure to mention it to the agent although they usually ask.

  1. Profession

There are a few professions that can qualify you for discounts. For example, you can get a great deal if you are a member of US military. Doctors, teachers, emergency responders and engineers are only some of the professions that receive preferential rates. Check these jobs that qualify for cheap auto insurance. You can also qualify if you are a member of certain associations or your employer has a special deal with certain carriers.

These are the key factors that affect automobile insurance rates and it may take time to improve on them. If you are looking for an immediate effect on premiums your best bet would be shopping around for the lowest quotes and comparing them to find the best value coverage. You can get several hundred dollars of savings by just following this tip. First you need to find a comparison website just like this one and check which companies have attractive offers.

Share on Pinterest
There are no images.