10 Things That Affect Car Insurance Premium Rates
Having a car is a sign of independence. We all long for the day when we can take to the road and choose when, where, and how far we want to go without the influence of others. However, along with that independence comes a host of responsibilities. Insurance, for example, can be quite costly and at times, unpredictable. There are many factors that can impact your rates for the better or worse. Here are 10 of the most common.
Demographics
Your age, gender, marital status, and where you live can have a major impact on your insurance rates. Men usually have to pay higher rates than women, and single peoples generally pay more than married couples. Another demographic that may have an impact on your insurance is where you live. Larger cities with dense populations can expose you to a greater risk for accidents, theft, and potential injuries; factors that are often outside of your control.
Driving record
Your past driving record also can affect your premiums. If you have a history of traffic violations, you can be pretty confident that your rates are going to go up. Even incurring a small minor accident could have a negative impact on your rates. The longer you go without these incidents, the less likely you will have an increase in premiums.
DUIs or reckless driving charges
If you have a reckless driving charge or a DUI on your record, you will need SR-22 insurance; otherwise, you will incur much higher rates. If you’re wondering what is an SR-22 it is not actually an insurance policy but is a state-mandated certificate that declares that you are carrying the required amount of car insurance, guaranteeing that you are covered for any accidents you may incur. If you fail to maintain the coverage, the insurance company is under obligation to inform the state of your failure to do so.
Credit history
While insurance companies don’t look at credit in terms of giving you a loan for your insurance, they will give you a credit-based insurance score, which can also be a factor. However, this practice is not a policy in every state in the country, as some states have banned it. So before you buy your insurance, check to see if this will be a factor in determining your rates.
Profession
Many insurance companies may make a connection between what you do for a living and your potential for violations. For example, someone who drives for a living is more likely to get in an accident than a work-at-home receptionist. The more time you spend on the road, the more at risk you are for an accident.
Vehicle safety rating
The higher your vehicle safety rating the lower your insurance rates could be. There are several things that are factored into a safety rating including airbags, automatic seat belts, and traction control. Whatever is used to limit the risk of accident or injury can work in your favor when it comes to lowering your premiums.
Driving experience
Young drivers lack the experience that helps them to avoid accidents. The longer you have been driving the less likely you will make mistakes that could lead to violations. The more driving experience you have the lower the risk to the insurance company.
Criminal history
Your past criminal record can play a role in determining your premiums, especially if they are driving related. Those kinds of marks have the potential for a damaging impact on your premiums. For example, hit-and-runs, reckless driving charges, and DUIs can carry a heavy punch. In some areas, unless these convictions are expunged you can expect they will stay on your record for a minimum of five years.
Vehicle size
As a rule, larger vehicles tend to be safer if they are involved in an accident. So, many larger cars will usually have lower premiums than smaller vehicles. However, cars with larger engines (sports cars for example) can expect to have higher premiums. So, if you’re driving a V8, don’t expect to have a lower rating regardless of the vehicle size.
Insurance history
A history of continuous coverage can work in your favor when calculating premium costs. If you have gone for an extended period of time without insurance but had a license, then the insurance company will assume that you were driving without insurance. The more time you have with another carrier the less likely you will be charged higher rates.
Determining insurance premiums is a complicated process. Each insurance company may afford a different weight to each factor so it is always wise to get multiple quotes from different insurance companies so that you can be sure you’re getting the best rate possible.
This is a collaborative article.
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