Have you ever wondered why your auto insurance rate increased? You probably are not alone in your curiosity. There are several factors that may affect your how much you pay for your auto insurance.
- State Requirements
Depending on where you live in the country, the amount you are required to pay for your auto insurance may differ. Each individual state may have certain requirements it deems necessary that would ultimately affect your auto insurance rate. Additionally, if you elect to buy more coverage than what is deemed the bare minimum legally, you will probably end up paying more.
One way auto insurance companies determine what they charge for auto insurance is your age. Because young drivers are far less experienced behind the wheel, insurance companies assume that they will be more likely to get into accidents. Once a driver turns 25, their rates begin to decrease. One the other side of the coin, seniors (those 65 years of age or older) are, oftentimes, charge a higher rate for their insurance because they may have slower reaction times or worsening vision, etc. Additionally, seniors are more likely to become injured if they are involved in an auto collision.
- Car Make and Model
If you bought a more expensive car, you are more likely to pay more to insure it. Cars like BMWs or Ferraris are made overseas and are then shipped to the U.S. Because of this, less of these cars are made. Therefore, insurance companies increase the prices to insure these types of vehicles.
- High-Risk Violations
Your driving record ultimately affects how much you will end up paying for your auto insurance. If you are a safer driver with less claims on your policy, your insurance company will take note of this and provide you with a lower rate. If you tend to be a more aggressive driver who gets speeding tickets or gets involved in a lot of accidents, your insurance company will see you as a high-risk driver. High-Risk drivers pay more for their insurance than safe drivers do.
- Yearly Mileage
The more distance you drive, the more you will end up paying for your auto insurance. Insurance companies consider how often you are on the road when determining your insurance rate. Longer periods of time on the road may mean longer distances traveled. The more amount of time you spend on the road, the higher chance you may become involved in an auto collision. If your commutes tend to be on the shorter side, you may likely pay less for your policy.
- Credit History
If you have poor credit, insurance companies may charge you more for your insurance. If you live in a state that is not either California, Massachusetts, or Hawaii, your insurance company will take your credit history into account when determining your insurance rate. If you have a great credit score, you may be able to save some money on your insurance.
- Driving Record
Drivers with good driving records can pay up to as much as 40% less for their auto insurance than drivers with bad records. This is due to the fact that a lot of insurance companies offer discounts for safe driving. Keep in mind that if you file a lot of claims through your insurance company, regardless of whether or not you were at-fault in the accident, your rates may increase significantly. If you are involved in an accident, do not be surprised if your insurance rate jumps up for the next 3 to 5 years. If you have more experience behind the wheel, you may end up paying less for your insurance. For example, new drivers older than 25 tend to pay more than their peers who have had many years of driving experience.
- Zip Code
Where you live may affect your insurance rate. People who live in cities that have higher crime rates statistically or heavy traffic areas tend to be charged more for their insurance. Because rural areas tend to be far less congested, the people who live in these areas likely will be paying less for their insurance policies.
- Marital Status
If you are married, you are in luck! Insurance companies look at married couples are the least risky drivers to insure! Compared to other drivers, married couples are involved in 50% less accidents! Do not wait to let your insurance company know if you are married! You could safe yourself some money!
Believe it or not, in most states, it is not against the law to discriminate by gender. Statistically speaking, men under 25 pay the most for their auto insurance (about 15% more than their female counterparts). Once individuals reach the age of 30, insurance rates tend to become more similar.