When insurance companies determine their rates of coverage there are many factors that are taken into consideration. You probably are already aware of some of them, they are just common sense. But there are some areas that just may surprise you.
First up is your driving record. This is probably the biggest factor as to how much or how little you will be paying for your car insurance. When an insurance company looks at your driving history they check for the number of accidents you have been involved in, the number of claims you have submitted, no matter how big or small, and if you have any traffic violations. You could be paying for one accident for the next three years through increased premiums. But you may want to ask if your insurance carrier has a forgiveness policy. Some insurers will cut you some slack if it is your first accident and you have had a clean record for awhile.
Your age plays a big part in how much you will pay for your car insurance. Male drivers between the ages of 16 and 23 have a four times higher fatality rate than any other drivers. Once a driver gets married, the rates will start to ease. But next up are older drivers, especially 75 years and up.
Every year a list comes out with the top 10 cars that thieves love to steal. You may want to check if your car is on that list, and you certainly should think again if you are looking to buy one that is already on the list. Many of the cars are older and they steal them for parts, some are just easy to steal. But there are newer cars on the list, so be forewarned.
Believe it or not, 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.
There is one area that you should avoid at all costs and that is letting your insurance coverage lapse. If you fail to pay, or you change your insurance without letting your previous company know and they cancel your coverage, you will not only have to pay more, you may have trouble finding someone to cover you.
The amount of time you are on the road will also be factored into your rates. Someone who is on the road commuting to work two hours a day is going to pay more to insure their car than someone who works from home and uses their vehicle mostly for leisure.
Make note of the things that you can do to reduce your rates – drive safely, keep your credit record clean, and let your insurance agent know if your driving times have been reduced. Every little bit helps and altogether they make a difference on how much or how little you will pay for your coverage.