Do you ever get the feeling your insurance company isn’t telling you the whole story when it comes to the price you pay for coverage? Believe it or not, that might be true. If you are like many Arizona drivers, you probably believe your insurance rates are closely tied to your driving record. While driving habits are indeed important, they are not the only variable considered in an insurance quote. Continue reading and we’ll fill you in on the three things every driver needs to know before shopping for Arizona car insurance quotes.
1. Where You Live Matters
When the Insurance Information Institute decided to analyze the cost of auto insurance for the average consumer, they started with national data from the National Association of Insurance Commissioners (NAIC) that revealed an average expenditure of approximately $841 per year in 2013. Broken down by state, however, the numbers tell a very different story. Drivers in New Jersey pay a hefty$1,254 per year compared to those of us in Arizona who come in below average at $811 per year.
If you are fortunate enough to live in Arizona, give yourself a pat on the back. Just keep in mind, however, that the geographical price discrepancies do not stop at the state level. In fact, rates for the same person and same policy can vary dramatically from zip code to zip code. According to Kiplinger, the difference in average premiums between zip codes in the same state may be more than that between two different states.
What’s the reason for the inconsistency? It all comes down to risk. Insurers go to great lengths to weigh the risk of specific regions as they pertain to car insurance claims. That is why a person who lives in an urban area with a high car theft rate and heavy traffic may pay much more for Arizona car insurance than someone who lives in a rural area with a small population.
2. What You Use Your Car For Matters, Too
You might be surprised to know that what you use your car for is a major factor when calculating car insurance premiums. Most companies categorize vehicle usage as either Pleasure, Work (Commuting), Farm, or Business Use. As you might expect, Pleasure Use vehicles almost always receive a lower rate than either Work, Farm, or Business Use vehicles. The reason for this all comes down to the number of miles driven. The fewer miles you drive, the less chance of you getting into an accident, given all other factors are equal. But before you call your agent to tell them to classify your vehicles as pleasure use, understand that if you drive your vehicle more than about 7,500 miles per year, you won’t receive a Pleasure Use classification.
If you drive your vehicle back-and-forth to work, then your car will be rated in the Work/Commuting category. Generally speaking, one will pay a bit more for their insurance when using it for commuting purposes. Farm Use is similar to the Work category, but is used for true farm use, such as at a ranch or vineyard.
Finally, if you are using your vehicle for business purposes such as making sales calls or delivering goods, you should insurance your vehicle with Business Auto or sometimes referred to as Commercial Auto Insurance.
Which brings us to our next point…
3. Each Insurance Company Formulates Risk Factors Differently
No two insurance companies are exactly alike, which is why it pays to compare multiple rates when shopping for Arizona car insurance quotes. Here at Vanyo Insurance Group, we know that no two drivers are exactly alike either. Each insurance company has a different appetite for specific types of risk. Factors like age, gender, credit score, driving history, zip code, and vehicle type are typically all considered, but each evaluated with different emphasis. If you are in the market for Arizona auto insurance, take time to explore your options. The difference between two different quotes could save you hundreds.