You shouldn't be surprised if your auto insurance premium goes up if you're at fault in an accident or get a few speeding fines. However, a rate increase may leave you scratching your head if there aren't any accidents or tickets. Providers determine rates depending on certain elements you have control over and others you don't. Learn about what affects your vehicle insurance premiums and what you can do to lower them.
Which Factors Affecting Rate Increases Do You Have Control Over?
When determining your vehicle insurance premium and renewal rates, insurers consider a variety of criteria.Your Credit
Your auto insurance premiums are affected by factors such as your credit history and types of credit, such as loans and credit cards. Many insurance firms use a credit-based insurance score. When renewing your policy, your insurance carrier may raise your rate if your credit score drops. Credit-based insurance ratings are legal in most states; however, they are prohibited in Hawaii, Massachusetts, and California. What you can do: Improve your credit score if your auto insurance rate rises due to a decline in your credit score. Pay your credit cards on time to keep your balances low.Driving Record and Claims History
If you cause an accident, the insurance company may view you as a higher risk and boost your rates. However, if you are involved in multiple incidents for which you were not at fault, a carrier may classify you as a high-risk driver. If you submit many comprehensive claims for things like shattered windshields, weather damage, or animal contact, such as hitting wildlife, your insurer may raise your rate. What you can do: Accidents should be avoided at all costs. Minor damage, such as a cracked window, must be paid out of pocket.A History of Convictions or Surcharges
Your insurer may raise your auto insurance price if you commit traffic infractions such as driving while intoxicated or speeding. If you were 50 percent or more at blame for the accident, your insurance provider might boost your rate. A history of late payments may also result in a premium rise from the insurance. Surcharges are the term used by carriers to describe these types of increases. The increase could last until you demonstrate that you're a safe driver. The severity of the occurrence will determine the amount of the fee and the time you must pay it. What you can do: Following an at-fault accident, improve your driving skills. Accidents should be avoided at all costs. Consider including accident forgiveness in your policy.What Other Factors Influence the Cost of Car Insurance?
Other factors beyond your control may also lead to a rate increase. Alteration in marital status: According to statistics, single drivers submit more claims than married drivers. If you divorce, or if one of your spouses dies, your rate may rise. Adding new drivers to your coverage: The firm may raise your price if you add a new spouse or a teen driver to your vehicle insurance policy. Gender marker shift: Female drivers experience fewer traffic accidents than male drivers. The insurer may raise your rate if you change your gender marker from female to male. Your location: Your provider may boost your premium if claims for crashes, weather-related damages, auto theft, or vandalism increase in your ZIP code. Make and model of your car: If there is an increase in claims for your car's make and model, your carrier may raise your rate. Age: Younger drivers typically pay higher insurance rates. While your rates may reduce as a young adult and grow in middle age, they may rise in your 60s. Lost discounts: If you have a good-driver discount and have an accident, if you have an employer discount and change employment, or if you cancel a policy for which you have a multipolicy discount, your auto insurance rate may go up. Across-the-board rate increase: Insurance companies may raise the rates of all policyholders for various reasons. These include an increase in claims, an increase in the number of cars on the road, and an increase in accidents involving injuries and fatalities.How to Save Money on Auto Insurance
Insurance companies might use a variety of factors to decide your rates, but that doesn't mean you have no say over them. Examine your coverages when it's time to renew your policy. Remove everything you no longer require. For example, if you've paid off your automobile, you should consider removing collision and comprehensive coverage. Speak with your agent to see if you are eligible for any discount programs. Some organizations, for example, give significant discounts for vehicles equipped with safety and security features such as airbags, anti-theft systems, and daytime running lights. Many providers offer discounts when you combine home and auto insurance or purchase multiple auto policies. Raising your deductible can also help you save money. While you may have to pay a little more out of pocket after a covered loss, you will benefit from a cheaper premium. Reduced annual mileage is an excellent strategy to cut your rates. If you drive a car that is expensive to insure, consider trading it in for a more practical vehicle. Premiums for a premium or electric vehicles are frequently higher since they are more expensive to fix.Frequently Asked Questions (FAQs)
What factors influence auto insurance rates?
Car insurance prices are determined by various criteria unrelated to your policy, such as your location, age, gender, and marital status. Direct determinants include your car type, coverage limitations, deductibles, driving record, and claims history. Data on how frequently people in these various populations have accidents will influence your rates. Your insurance company may potentially offer you a discount if you acquire various types of coverage.How do you compare automobile insurance rates?
Countless websites allow you to compare prices from several insurers instantly. You may be required to input contact information on these websites and receive more than just car insurance quotes. If you prefer not to receive additional marketing, you can contact a few insurers directly and get a price. Just make sure to obtain comparable policies in terms of coverage and deductibles so that you can make an accurate comparison.