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7 Factors That Affect Your Car Insurance Rate


7 Factors That Affect Your Car Insurance Rate

If you’re complaining about the high cost of car insurance, you should know there are several factors that contribute to the rate you are charged.
The insurance company application is going to ask for your gender, age and marital status. Male drivers under 25 are statistically more likely to be involved in accidents or receive tickets for traffic violations so their rates are higher. Married people tend to have fewer auto claims than those who are single, so they usually get a break.

Besides your gender, age, and marital status, one of the first things to consider is the make and model of the vehicle that you drive. If you have a flashy sports car or very large SUV, your premiums are going to be higher. If you purchase a four-door sedan your premiums won’t be so bad. The reason is the cost of repairs, safety ratings, safety features, crash ratings, and rate of vehicle theft. All of these things come into play when determining premium rates.

Second, choose your coverages wisely. If you have collision and comprehensive coverage, a higher deductible will lower the premium. If you are currently making payments on your car, your lender will require you to carry these two coverages to protect the vehicle from damage. However, if you don’t owe anyone money on your car, you may want to forego collision and comprehensive coverage. Just remember that you’ll be paying for repairs out of your own pocket.

On a similar note, check the limits you carry on your liability, uninsured and under-insured motorist coverage. The lower the limits the lower the liability, but on the flip side, the lower the limits, the less protected you are if you are involved in an accident.

Third, keep your driving record clean. Your insurance company will check the motor vehicle records to see if you’ve received any tickets or been in any accidents in the past 3 to 5 years. If you haven’t received any tickets or been in any accidents that were your fault, your rates will be lower.

Fourth, where do you live and where do you park your car? Insurance companies gather a lot of data about the number of claims that occur in several locations so they can base their ratings on the claims experience of the area where you reside. If you park your vehicle in a garage, then your premiums should go down because your car is less likely to be stolen or vandalized. If you have a car alarm, you may get a discount on your premiums.

Fifth, think about your job. If you have changed jobs since applying for insurance and your commute is shorter, you work from home, or the place where you drive is different (congested city vs. quiet neighborhoods) let your agent know because the less you drive, and the less you drive in a lot of traffic, the less you should have to pay.

Sixth, how often do you pay your premium? If you pay month-to-month, your rate will be higher because of the administrative fees that your insurance company charges. If you can, stick the money away and pay your premium quarterly, half-yearly or annually.

Seventh, your credit score matters. May people are surprised to find out that their credit history is looked at when premium rates are determined. It is believed that if your credit history indicates you are responsible with your money, then you are probably responsible in other areas of your life as well, including behind the wheel. If you have a poor credit score, an insurance company will offer you a higher rate or decline to offer you any insurance at all.

There are a lot of factors that go into the premium rate you pay for auto insurance. Don’t forget that if you are a student you may qualify for student discounts, if you are a senior you may qualify for senior discounts, and if you have more than one type of policy with the insurance company, you may qualify for multi-line discounts. Ask your agent how you can effectively lower your premium but still have the protection you need.