Insurance companies take into consideration a number of factors when determining your car insurance rates. There are some things that you really don’t have much control over, but there are some things that the insurance companies use as a gauge for your insurance rates that you can change. Here are some of the major factors that are used to increase or decrease your rates.
The first thing your insurance agent will ask you is if you have had any tickets or accidents in the last three years. This is the number one cause of higher rates. The amount your insurance will increase after an accident depends on your previous driving history, how severe the accident was, who was at fault, the number of claims you have submitted in the past, and the policy of your insurance company.
Next up is your age. Records show that young drivers between the ages of 16 and 23 are a high risk age group so they will pay more for their insurance. Drivers who are 75 years of age or older are the next highest risk group. So what does that leave as the safest ages for drivers? If you are between 40 and 50 years old you will pay less for your car insurance premiums.
Here’s one you may not have thought would determine the cost of your auto insurance – your occupation. The professions that are the lowest risk and subsequently pay lower rates are scientists, pilots and artists. If you are a lawyer or a business executive, your work stress and cell phone use while driving contributes to your higher rates.
You may be unaware but your credit score has a lot to do with how much you pay for your car insurance. The insurance industry is able to use your credit score to determine your rates, so if your credit score is good, you’re safe. If you are having financial problems, check your credit score and see if there are any errors on it. If there aren’t then set up a plan to pay your bills on time and your score could improve in as little as six months time.
If you have let your insurance lapse at all, you will be considered a higher risk and will not only pay more for your insurance, some companies will not insure you at all. Some states are notified by insurance companies when policies lapse and you may be required to prove that you have been reinstated.
Where you live and how you store your car is a factor that will affect your rates. If you live in the city you will pay more than your neighbors in the suburbs. Higher crime areas present higher risks and result in higher rates. And if you put your car in your garage at night or you have to park it on the street will determine if you will pay more or less for your insurance. Companies feel that your vehicle is more prone to theft if it is kept on the street.
A newer vehicle can sometimes cost more to be insured than al older vehicle. If you are driving an older car that is only valued at around $2,100 you should reconsider carrying collision coverage. But by the same token, some of the newer vehicles have many more safety options that automatically reduce rate because they present a lower risk of theft or injuries. Factory installed air bags, passenger side air bags, anti-lock brakes, and security systems that sound alarms or prevent the car from being started are factors that may reduce your premiums.