Have you ever wondered why your car insurance rate can vary so much from your friends’ or relatives’ rates? The fact is, the process can seem quite perplexing unless you’re in the insurance business.
To help you understand how the average car insurance rates are developed and what factors affect your car insurance rates today and over time, we’ve compiled a list of important considerations insurance carriers use when determining premiums. As you explore this list, be sure to make a note of ways you might be able to lower your rate without having to give up good coverage.
-
Your Past Driving Experiences
As you might imagine, new drivers and those with records of accidents and vehicle-related incidents will not get the best rates. Use this fact to encourage you to always follow the rules of the road, never text while driving and always opt for a designated driver.
-
Your Age
Although it doesn’t always seem fair for younger drivers, age does play a role in figuring out how car insurance premiums are calculated. An 18-year-old is always a higher risk than a 38-year-old because no one knows if the 18-year-old is going to end up with a good or questionable driving record. An 18-year-old also doesn’t have as much experience on the road.
-
Your Vehicle
Think that the type of car or truck you buy doesn’t matter? Think again. An expensive vehicle is always going to be more expensive to insure. Keep that in mind when shopping around for new wheels. Sure, the Ferrari price tag might seem affordable at first glance, but you have to take everything into consideration, from maintenance to repairs to insurance.
-
Your Area of the Country
Where you live has as much to do with your car insurance as many other factors. Insurers know that in certain parts of the nation, rates of theft or accidents are higher. They’ll use their charts and information to determine the rate they feel most comfortable quoting you.
-
Your Insurance History
Have you made numerous car insurance claims in the past? You could be seen as a high risk by insurance carriers. On the converse side, if you have been with the same insurance company for many years and never made an automobile insurance claim, you can always ask for a discounted rate based on your excellent record.
-
Your Driving Distances (Annually)
It just makes sense that if you drive more than the average person, you have a higher chance of getting into an accident. Expect your car insurance provider to ask you to give typical yearly or monthly mileage rates as part of your quote calculations.
No matter what, be sure to check around for the best possible rates for your needs. Contact a local insurance agent to snag the latest deals and best rates.
