Why do you pay what you pay for car insurance? Why is your rate different from your partner’s or friend’s rate? What factors affect your car insurance premiums. Here we’ll tell you the 7 big things that affect your rates.
- Your Coverage And Deductibles
Car insurance providers allow you to choose your deductible and decide whether to add additional coverage that isn’t necessarily required by the laws in your state. The specifics of your coverage and deductibles play a major role in your monthly payment.
- What You Drive
By collecting a large amount of data from customer claims and analyzing industry safety reports, car insurance providers often develop vehicle safety ratings and offer discounts to customers who drive safer vehicles.
Some insurers increase premiums for cars more susceptible to damage, occupant injury, or theft, and lower rates for those that fare better than the norm.
Before you head down to the dealership, do some research. Does the vehicle that has caught your eye have strong safety ratings? Is the same particular model often stolen? Knowing the answers to a few simple questions can go a long way in keeping your rates low.
- How Often, And How Far, You Drive
People who use their car for business and long-distance commuting normally pay more than those who drive less. The more miles you drive in a year, the higher the chances of an accident – regardless of how safe a driver you are.
- Where You Live
Generally, due to higher rates of vandalism, theft, and accidents, urban drivers pay more for car insurance than do those in small towns or rural areas.
- Your Driving Record
Drivers who cause accidents generally must pay more than those who are accident-free for several years.
If you’ve been accident-free for a long period of time, don’t get complacent! Remain vigilant and maintain your good driving habits.
- Your Credit History
It has been shown certain credit information helps predict future insurance claims. Where applicable, many insurance companies use credit history to help determine the cost of car insurance. Maintaining good credit can have a positive impact on the cost of your car insurance.
- Your Age, Sex, And Marital Status
Accident rates are higher for all drivers under age 25, especially young males and single males. Insurance prices in most states reflect these differences.
If you’re a student, you might also be in line for a discount. Most car insurers provide discounts to student-drivers who maintain good grades. In some states, younger drivers are also able to take driver safety courses that will lower premiums.
Credit: State Farm