There are plenty of factors that affect your car insurance. Some of them you can alter, while some you have little or no control over. In most cases, car insurance providers use factors such as your driving history and zip code to determine if you can get the cheapest car insurance for you.
To help you gain a better understanding of how your premiums are calculated, here is a list of five factors that affect your car insurance rates.
Your age has a big impact on a lot of your driving factors, but it will certainly get you cheaper insurance as you age. Younger drivers are more prone to accidents and thus pay higher premiums. Young drivers can mitigate these higher premiums by maintaining a good driving history, refraining from speeding, and looking for discounts such a good student and good driver discounts.
On the other hand, senior drivers may pay more than their younger counterparts. Men and women under fifty will likely pay less than those over sixty-five. Check which companies are good for senior policies and look for other discounts like military service and customer loyalty.
Believe it or not, your ZIP code has a lot to do with your insurance premium. Each state has different minimum requirements for its drivers, so where you live will often help you determine your insurance needs. Learn what the requirements are for your state and then you will be able to determine how much extra coverage you will need to purchase.
Depending on where you live, you may spend more for insurance if you drive more miles than average, drive at peak times, or live in an urban area where vandalism and theft are more common. High-risk areas and situations will heighten your chances of having an accident or needing to file a claim. This, in turn, will spike your premium.
Moving isn’t always an option, so check for a good driver or good student discounts if you live in high-risk areas.
3. Marital Status
Married drivers save more on average than single, divorced, or widowed drivers. This is because married drivers are assumed to share driving duties, resulting in fewer individual claims.
Gender also plays a role in your insurance premium. Men tend to pay higher premiums than women and younger men will have more expensive car insurance than younger women.
4. Driving History and Credit Score
Your driving history is likely the most important factor in how much you’re paying for car insurance. The better your driving history and the fewer accidents and traffic violations you’re involved in, the better rate you qualify for.
Roughly three years after a violation or accident, you can expect your rates to go down. You can also improve your driving record by avoiding speeding and using your phone while driving, slowing down in general, and easing up on your braking and cornering.
Your credit score is also a factor. Since drivers with higher credit scores tend to be better drivers, you will see significant discounts if you can raise your credit score. Drivers with lower credit scores can expect higher premiums and may be required to pay upfront.
Some states don’t factor in credit score in calculating premiums, so check your state’s regulations. However, chances are you can get a better deal with a better credit score. You can improve your credit score by paying bills on time and paying off lines of credit,
5. Claims History
If you have a long claims history, expect to pay more for your premiums. Also, you can expect your rate to increase after a claim. Many companies now offer accident forgiveness so your rates won’t be raised after an accident, but you will likely need to be with a company for a few years to qualify. Double-check your policy before you switch. Accident forgiveness is a reason to hang on to your current policy.
The Bottom Line
These are not the only factors influencing your car insurance quotes. Be sure to gather all your information before you begin to compare policies. Remember to look at more than price. You don’t want to end up with less coverage than you need because you went for a cheaper premium.
Also, have a list of all the discounts you might apply for and keep bonuses like accident forgiveness in mind.