Your vehicle insurance rates depend on many variables, some within your control like the make and model of your car or credit score; other elements are out of your hands such as age or marital status.
Distance driving also impacts rates; drivers who commute long distances tend to pay more than those driving locally for leisure purposes.
1. Age
Age can have a dramatic effect on car insurance premiums. Young, inexperienced drivers are more prone to accidents and risky driving behavior, thus incurring higher premiums than experienced older drivers.
Even one accident or speeding ticket on your record can increase your rate for several years; but as you gain more driving experience, this should diminish over time.
Gender can play an enormous role in your car insurance rates; men tend to pay more than women for full coverage car insurance policies until age 35 when their pay gap closes. Furthermore, zip codes and neighborhoods with higher risks for crime, natural disasters, or vehicle theft may see higher premiums than other areas.
2. Driving Record
Your driving record is one of the key determinants when it comes to car insurance rates, whether or not it involves speeding tickets or an at-fault accident. An excellent driving history signals low-risk behavior that insurance providers reward with lower premiums.
As opposed to minor violations and accidents, serious violations and accidents will drive rates skyward, leading insurers in some instances to deny coverage altogether or place drivers into state-backed high-risk pools. Each insurance provider weighs violations differently, taking into account how long violations remain on a record before making their determinations.
Vehicle make and model can also play an integral part in setting rates, with insurers considering how well each car protects its occupants while being resistant to damage and theft, among other considerations. Using this information to assign appropriate risk ratings for each car helps insurers set rates more effectively even when multiple cars are insured with one carrier.
3. Vehicle Type
Your vehicle plays an essential part in your car insurance rates, with insurers considering things such as engine size, design features, and repair or replacement costs to determine your rates. Insurers also look at the safety ratings of cars to gauge whether or not there has been a history of high claims filed on them.
The make and model of a vehicle can also affect rates, as their construction can alter how much damage is done during an accident. An SUV’s frame may be more susceptible to being damaged than that of a sedan. Furthermore, luxury vehicles tend to cost more to repair due to having more advanced parts.
4. Mileage
Your car’s mileage annually has an enormous influence on your car insurance premiums. While rates can differ depending on which company is providing cover, in general, the less you drive means lower premiums.
Most insurers will ask you to estimate your annual mileage. Being as accurate as possible when making this estimate will ensure lower premiums in the future. Underestimating could also result in additional fines later.
Some insurers provide “usage-based” car insurance policies, which enable drivers to track and verify their mileage through a telematics device. While this method may be more invasive than simply reporting annual mileage, it could result in significantly reduced premiums for excellent drivers. Speak with your Western agent today about usage-based car insurance options!
5. Safety Features
Modern cars are equipped with many safety features designed to make driving safer for you and your passengers, and insurers frequently offer discounts for cars with advanced systems like Automatic Emergency Braking (AEB).
Insurance companies determine rates using actuarial data which considers factors like repair costs, theft rate, and payments made on comprehensive claims. Vehicles equipped with high-rated safety features could potentially help lower premium costs.
Young drivers without much on-road experience tend to incur higher insurance rates due to their greater potential risk of accidents. Adding a teenager as a driver on your policy may also raise its rates; insurers factor this into their calculations when setting rates; however, you can lower these by maintaining a clean driving record and choosing an economical car.
6. Credit Score
Studies have demonstrated that drivers with good credit file fewer auto insurance claims, helping insurers mitigate risks more effectively. On the contrary, drivers with poor credit tend to file more claims and may experience higher premiums as a result.
Insurance companies consider more than just your credit score when assigning insurance policies for drivers, including gender, marital status, and ZIP code. They may also look at the make and model of the vehicle as well as the mileage driven each year and the safety features present on it.
However, certain states – like California, Hawaii, Massachusetts, and Michigan – have laws prohibiting insurance companies from using credit-based scores to determine rates. Even so, you could still save money by improving your financial health and making improvements that help lower car insurance premiums.
7. Driver’s Habits
Changing lanes without signals, cutting off other drivers, or weaving in and out of traffic are all dangerous driving practices that could significantly raise your insurance rates. Serious violations like DUIs or reckless driving could also see these rates skyrocket.
Even “safe” drivers can develop bad driving habits over time. Texting while driving, eating while on the road, reaching for objects while driving, and fiddling with radio settings are all distractions that need to be avoided when behind the wheel.
Due to higher vandalism and theft rates in urban areas, insurance rates for drivers in small towns or rural areas typically incur higher premiums than drivers who reside elsewhere. Cutting back on mileage or exploring usage-based programs are two strategies that could potentially bring your rates down.
