The type of insurance you decide to purchase the coverage you select, the limits you choose to cover and the deductible amount affect the monthly cost you’ll be paying for car insurance. What do you think will affect your premium for car insurance?
- the vehicle you select to drive
- your driving background and your driving habits
- your credit score
- the place you reside, and
- Your gender and age.
The answer is yes, each of these variables could affect your car insurance rate. For more information about the types of coverage as well as coverage limits and deductibles, go to the section on Buying Insurance for Your Car. For more information on how your vehicle choices, your driving record and personal information influence your insurance premiums for cars take a look.
Vehicle Choice and Driving History Affect Premiums
Certain aspects that are in your control such as what vehicle you select to use, driving record and habits, as well as your credit history can impact the amount you’ll have to have to pay for insurance.
The cost of car insurance is determined by the cost of repairs as well as the potential risk of claims involving specific automobiles.
Cars with high insurance Costs
The latest, more expensive and better-performing vehicles typically need higher insurance premiums. Drivers must be aware of their expected premiums prior to purchasing a vehicle to avoid paying charges for insurance that are shockingly expensive.
Safety Features Impact Insurance Premiums
Cars that have certain features could be suitable to receive discounts. In general, vehicles with features such as daytime running lights and anti-lock brakes, airbags, electronic stability control and anti-theft systems are eligible to receive a discount. Automated braking, lane assist, blind-spot recognition, and reverse with video assistance, among other recently developed safety systems, are anticipated to give reductions in the near future..
Driving History and Habits
Drivers who have fewer accidents and tickets than the rest of us pay lower rates. However, some drivers do not be aware that the more they travel, the more their insurance premiums will be. Public transportation, carpooling, and other options can lower annual mileage for motorists who want to cut their costs. Drivers who utilize their cars to work from home or drive late at night are also likely to pay higher rates.
Inability to reveal your driving habits to an insurance company may result in a claim being denied. How does the insurance company be aware? If your claim gets filed an adjuster is likely to examine the car, in addition to the typical annual mileage will be determined using the Odometer readings. When the calculation of mileage is substantially higher than the driver’s claimed mileage then the insurance company may decline the claim. Similar to when a driver suffers an accident while driving for business the insurance company could refuse to pay when the insured party concealed the fact that he or used the vehicle to conduct business.
A good credit rating is essential for a variety of reasons, but many drivers do not realize that having lower insurance rates for their cars is just one of the benefits. Research shows that people with lower credit scores submit more and more insurance claims. This means that drivers who have poor credit scores will have to pay much higher rates as compared to those with higher credit scores. Some states have restricted scoring credit when the calculation of insurance premiums, however most states haven’t. (To find out how you can start getting your credit back on track check out the ways to build your credit.)
Although drivers have the option of choosing which city they reside in but car insurance is likely not one of the major aspects when making this decision. The local crime rate, the frequency of storms, and even traffic patterns can affect the amount that drivers pay for the form of premiums. The specific location of a driver’s home could be a factor in the cost calculation.
Factors Beyond Your Control
Other variables that could impact your premiums–such as gender and age are not at your disposal.
Does Age Affect Car Insurance Premiums
Drivers who are younger, particularly those who are younger than 25 years old, will have to pay more rates.
Does Gender Affect Car Insurance Premiums
All other things being the same, males will often be required to pay more than women. Although, some states don’t let gender affect premiums.
Common Car Insurance Premium Discounts
Beyond the safety aspects Insurance companies also offer a variety of discounts for drivers. These discounts typically fall within three different categories: affiliation-based, merit-based and customer-service discounts.
Insurance companies typically offer discounts based on merit for people with a great driving record or who have lower annual mileage, for instance. Some companies offer discounts to drivers who have completed defensive driving or a driver education course. These discounts are often contingent on the behavior of non-driving drivers and include discounts for good students for young drivers.
Discounts based on affiliation depend on the user being a member of a specific segment or demographic. This type of discount can include military discounts and senior citizen discounts. discounted prices for those with low incomes as well as discounts for membership in specific organizations (frequently known as “affinity” discounts).
Discounts for customer service are usually created to encourage customers to do business with them. Customers who own multiple cars through the same firm typically get a multi-car discount or those who opt to purchase additional policies through the business, particularly homeowners insurance. (Purchasing at least two kinds of insurance through one firm is commonly referred to as “bundling.”)
Customers who are with the same organization for several years could qualify to receive loyalty discounts. Other discounts based on customer service, such as discounts when you accept automated payments, paperless statements and early renewals — are used to motivate customers to become efficient.
Drivers shouldn’t be waiting for insurance companies to announce discounts. It’s best to take action by contacting your insurance provider inquiring about discount offers that may be available in your specific circumstance. Drivers should also think about membership with organizations that allow them to save money on insurance premiums for cars as well as other benefits.
The Bottom Line
Drivers have the option to cut down on their car insurance costs. Find a car with reasonable insurance rates, maintain good driving records and build a good credit rating, as well as research discounts. Certain actions may require a bit longer, such as improving your credit score or altering your driving habits. But others can be a benefit immediately like asking about discounts and applying the discounts to your policy.