When it comes to insurance, having the right amount of coverage should be the most important factor. However, that does not mean you should pay more for coverage than you have to. After all, car insurance can be a significant expense for the average household, with the average U.S. driver paying $866 for liability, collision, and comprehensive coverage in 2014. Of course, individual risk factors determine how much an insurance company will charge you for coverage, which could be much more or much less than the average rate. Continue reading to learn which factors affect the cost of car insurance and what you can do to keep your premiums in check.
Variables that Affect Insurance Rates
There are many variables that insurance companies examine when determining how much to charge a customer for car insurance. Those variables tell the insurer a lot about the driver – specifically the likelihood that he or she will file a future claim. Examples include:
Certain vehicles cost more to insure, and they are not always necessarily the ones you might think of first. High-value vehicles may cost more to repair or replace, but some of the more affordable cars and trucks on the market are often prime targets for theft.
Where You Live
Drivers in densely populated areas may pay more for coverage since their risk of a crash is higher. Likewise, drivers who live and park their vehicles in high-crime areas may pay more due to the risk of theft or vandalism.
How Much You Drive
People who drive their cars mostly for pleasure tend to be in fewer accidents than those who drive long commutes or drive a lot for business. You could pay more if you use your vehicle for business purposes, and you might be rewarded with a lower rate if you are retired, work from home, or put fewer than 10,000 miles per year on your vehicle.
Studies have linked crash risk and claim frequency based on age, gender, and even marital status. Young drivers and male drivers tend to pay more for coverage since they pose the greatest accident risk. In fact, teen drivers under age 20 are nearly three times more likely to be in a collision than older drivers. Fortunately, discounts may be available for student drivers who can show proof of good grades while attending school. In addition to age and gender, insurance companies will also want to know if a driver has a recent history of car accidents, insurance claims, or traffic violations, as these factors indicate a driver’s future claims and driving behavior.
Your Credit Report
Credit reports contain vital information that many insurers use to determine driver behaviors and claims risk. If you carry high amounts of debt or have a history of bankruptcies or late payments, you may be penalized with higher rates.
Some of these variables, such as your age, are impossible to change. Others, such as the type of vehicle you drive or where you live, would be impractical to alter. Some, however, are well within the realm of change.
Comparison Shop with a Professional
Though you should be most mindful of the quality and amount of coverage you purchase, it is also important to shop rates from multiple carriers to ensure you are getting a good value on your coverage. We recommend shopping with an independent agent here at Vanyo Insurance Group to ensure you are paired with the coverage and insurance company that is right for you. Contact us today for more information or to request your free quotes. We look forward to serving you soon.