Auto insurance premiums are determined by various factors, some of which you may not even be aware of. The type of car you drive, your driving record, and your age all influence how much you pay for coverage. However, did you know that where you live can also affect your rates?
Insurance companies consider crime rates, weather conditions, and even the number of uninsured drivers in your state when setting premiums. So how do you know what to expect when it comes time to renew your policy? Keep reading for a breakdown of the most important factors that influence premiums.
Your Driving Record:
Your driving record is made up of moving vehicle infractions and at-fault collisions. It’s one of the most critical elements in determining your auto insurance rates. Depending on your state, car insurance companies examine your driving history for the previous three to five years. Expect to pay more for automobile insurance if you have caused a collision or received traffic citations.
You can work on your driving record by taking a defensive driving course, which may entitle you to a discount from your insurer.
Your Credit Score:
Your credit score is another key consideration when determining your premium. Insurance firms look at it to see if you are likely to file a claim. Your rates will be higher if your score is lower.
You can improve your credit score by paying your bills on time, maintaining a good credit history, and using a credit monitoring service.
The Vehicle You Drive:
The type of car you drive also plays a role in how much you’ll pay for coverage. Luxury automobiles and sports cars are more expensive to insure than sedans and SUVs. They’re more likely to be involved in accidents and thefts.
Suppose you’re looking for ways to save on auto insurance. Consider trading in your high-end ride for something more moderate. You can also get discounts on features like airbags and anti-theft devices.
Theft and vandalism, a higher rate of accidents, and environmental factors such as extreme weather help determine your premium. If you live in an area with a higher crime rate, you can expect to pay more for your coverage. The same is true if you live in a hurricane-prone region. Your location plays a role in how much you’ll pay for auto insurance.
You can’t do much about your location, but you can be aware of how it affects your premium. If you live in a high-crime neighborhood, consider parking your vehicle in a garage or guarded lot. Similarly, if you live in a hurricane-prone area, consider buying comprehensive coverage to protect your vehicle from weather damage.
Your Car Insurance History:
If you’re a new driver and on your first auto insurance policy, premiums will likely be higher. Because motor insurers don’t have much data on you, they won’t know what kind of risk you represent.
Moreover, if you don’t have auto insurance for some time, usually more than 30 days, you may be considered a high-risk driver when you do purchase a policy. Auto insurers typically offer discounts to drivers who have been insured continuously for five years or more without any lapse in coverage.
Daniel Fabulic Insurance Agency, serving Shepherdsville, KY, can help you get the most appropriate and reasonably priced auto insurance policy no matter your situation. Whether you’re a high-risk driver or have a perfect driving record, we can find the right policy for you.