We’ve all seen tons of commercials touting the lowest rates when it comes to car insurance. Then you get a quote and ask yourself, “why are my rates so high?”
It turns out, what you pay for car insurance is not the same for everyone. There are a lot of factors that go into what you pay — some of which are not under your control. We asked the experts at Freeway Insurance for their thoughts on what affects the price of car insurance. Here’s what they had to say:
1You Have a Poor Driving Record
If you have past accidents, tickets, and other violations on your record, your rates are likely to be higher. Other than driving slower and safer, you can see if your state uses a points system. If so, there are sometimes classes you can take to help reduce points. Beyond that, time will knock those bad marks off your driving record, so be sure to follow-up with your insurance company to adjust your rates as they do.
2What Car You Drive & How Often
This factor can be a bit of a catch-22. A newer, more expensive car costs more to insure because of its value. However, an older, less expensive car poses more risks of damage in the event of an accident because it may be less safe. How often you drive your car, new or old, also makes a difference. The more you’re on the road, the more opportunity there is to be in an accident. If you are in the market for your next car, look for something with high safety ratings and a modest value.
3Your Insurance History
Cancelling a past policy, even if it’s with a different insurance company, can make future policies be more expensive. When getting a new policy, explain to your agent the reasons you cancelled and see if they would be willing to negotiate a lower premium.
4Where Your Vehicle Lives
Is your car parked in a secure garage, in a town with low crime rates, and a smaller population? Then you are likely to pay less than someone who is parked on the street in a big city that is prone to flooding. Things like crime rates, weather patterns, and number of accidents in the surrounding area can all affect your car insurance premium. If there’s less of a possibility that something could happen to your car, the lower the rate.
This is something to consider when moving or buying a home. Work with your insurance company to see if one location is considered more desirable than another when it comes to housing or garaging your car.
5Your Current Age
Your age is definitely one of the things you can’t control. Drivers who are under 20 years old get the highest rates. CDC states that there’s a higher likelihood for teenagers in failing to determine danger. They’re also more prone to making grave mistakes, which can lead to fatal crashes. Once you reach your early 20s, the price starts to drop. The rates will then continue to decrease and will even bottom out around your 50s. Still, car insurance rates frequently increase again later in life.
While there is not much teens can do but to wait it out, some insurance companies will offer discounts if the teen is attached to their parent’s policy or if the parents have been longtime customers.
6Your Other Insurance Policies
Similar to internet providers, insurance companies love to bundle. If you have your homeowners or renters insurance, life insurance, or other property insurance with different companies, you could be missing out on some good deals. Shop around, but bundling policies is often going to be the best way to save on all of those policies.
The lower the deductible, the higher the premium, and vice versa. If you are a relatively safe driver or don’t drive often, you can look at paying a higher deductible to help lower the premiums payments.
8Your Marital Status
Should it matter if you’re married or not when it comes to your insurance rates? No, probably not. But insurance companies look at the numbers, and statistics show that married couples file fewer claims than their single, divorced, or widowed counterparts.
Since saving some money on car insurance is probably not the best reason to get married, you can look at adding another vehicle to your policy if you do have a significant other. You can also look at bundling your insurance with homeowners or renters insurance for a discount.
9Your Credit Score
Poor credit reflects negatively to insurers. Luckily, in some states like California and Michigan, the use of credit information in determining auto insurance rates is either strictly limited or entirely prohibited. As you work to improve your credit, check with your insurer to see if rates can be adjusted.