Understanding the Factors that Increase your Auto Insurance Premium


There are many factors that can increase or decrease the amount of auto insurance premium you are asked to pay. While many of these factors can be controlled by taking simple steps, some of these factors cannot be controlled. This article will elaborate on some controllable and some uncontrollable factors that increase the amount of auto insurance premium you pay.

Age, Gender and Marital Status are Uncontrollable Factors

People who are under the age of 25 are considered as risky drivers by vehicle insurance companies and people over the age of 65 are also considered as risky drivers. People who are between the ages of 25 – 65 are considered as safe drivers provided they fit the other requirements. Over the past few years auto insurance companies have noticed that male drivers tend to get into more accidents than female drivers.

Vehicle insurance companies also believe that male drivers are more likely to commit various road violations hence the premium charged to a male driver is more than the premium charged to a female driver. Vehicle insurance companies believe that males who are married drive more safely than people who are not married. Males who are married will be offered a lower premium than unmarried males who have an identical driving record.

Driving record and Credit History are Controllable Factors

The driving record of a person indicates the number of accidents he has been in, the number of violations he has committed and they give the auto insurance company an estimate if the person in question is a safe driver or not. Vehicle owners who have no or few road violations are often offered a lower premium compared to vehicle owners who have a history of committing violations or getting into accidents.

The credit history contains details of your financial account, your loan or credit history, your late payment history and your financial status. People who have a good credit history are most likely offered a low vehicle insurance premium since these people are more likely to pay their installments on time. People who have a bad credit history will either be asked to pay a high premium or they may be even declined auto insurance.

Other Controllable Factors

Other controllable factors that affect the amount of auto insurance premium you pay include the car you insure, the location you live in and if you have modifications or not. Cars that are expensive or hard to find often cost the car owner a higher premium compared to affordable cars or readily available cars. The area you live in and the areas you drive through will also affect the amount you pay.

If you park on the road, drive through traffic congested areas or live in an area that is known for thefts and vandalism then you will be charged a high premium. Car modifications can increase or decrease the amount of premium you pay to insurance companies. Certain modifications like modified lights, altered wheels, altered car bodies and altered bumpers cause the car owner to pay a high premium since these modifications are not by the standards. On the other hand helpful modifications like automatic seatbelts and theft alarm can decrease the payable premium since these modifications prevent accidents or reduce the chances of the car from being stolen.