The global recall of over 8 million Toyota models, including cars and trucks, is expected to not have an impact on insurance rates, according to several industry groups and insurance companies.
Although various models from Toyota have received top marks in safety ratings by the Insurance Institute for Highway Safety in the past, the global recall has placed such praised status into question.
The cost of automobile insurance is determined by several essential factors. This is not limited to the cost to fix the car, the overall safety record, and the model of the car.
The Insurance Information Institute, which is an insurance industry trade group, said that the average driver typically shells out about around $850 annually for insurance.
The Institute has cited seven primary factors which could influence the insurance costs.
The first factor is the driving record. Drivers will pay more if they previously had more serious traffic violations and more road mishaps. Moreover, car owners usually have to pay more if they have not availed of insurance for a certain number of years.
The second factor is miles driven. Policyholders have to pay more if they drive more miles since this heightens the probability of accidents. Persons who drive less than 10,000 miles annually will pay less. There are also some issuers that give discounts to drivers who engage in carpooling.
The third factor is the location of residence among other trends. Insurance providers usually take a look at local trends. These trends may include the number of car accidents, lawsuits, thefts, repairs, and medical care.
The fourth factor is the driver’s age. Statistics show that older drivers usually end up in fewer accidents compared to younger, less experienced drivers (especially teenagers). Due to this, companies typically charge more for drivers who are younger than 25 years old.
The fifth factor is the model of the car. Cars which are more expensive, which have higher auto theft rates, have poor safety records, or are more expensive to repair cost more to insure.
The sixth factor is the driver’s credit scores. Credit scores are increasingly becoming an essential factor in determining insurance rates. These scores are based on information such as length of credit history, outstanding debt, payment history, collections, and bankruptcies. To have better scores, paying regular credit and mortgage payments on time are always a wise move.
The seventh factor is the amount of coverage. Higher payments are required for larger policies. Policyholders should always be on the lookout for discount offers. Some companies look favorably on clients who avail of both auto insurance and homeowners’ policies with them.