Those experienced in the world of auto insurance will have a lot of ready answers when newer drivers ask them about what can affect their auto insurance rates. Many factors can bump up the rates you get from an insurer. Knowing more about these factors will help you get the best low payments for comprehensive premiums or any other kind of policy; pay attention to get your best insurance value when you’re looking for competitive car insurance rates.
Personal Driving History – Anything on your driving record can have a huge impact on your auto insurance rates. From an accident to a DUI, insurers look at your history and compile a kind of risk assessment for you. Even impersonal aspects like your age, gender and location can affect your rates in a big way.
Vehicle Model – Auto insurance companies also build your policy based on the specific car or truck you are driving. A company called the ISO provides risk assessments on each vehicle model according to collision statistics, theft statistics and much more. That means that your sporty new car could be costing you a lot in auto insurance based on some very generic statistical modeling.
Your Neighborhood – another big way that auto insurers calculate risk assessment for policies is based on the location where the car is primarily garaged. Insurers often ask for this in the form of a zip code. They then get statistics about auto theft, collisions, traffic incidents and much more in your specific neighborhood to impact how they will write a policy and charge premiums.
State Requirements – Your specific state’s requirements for insurance are a big factor in your personal auto insurance rates. Any existing state programs, such as requiring uninsured or underinsured coverage, offering limited-tort or full-tort options, or anything else that affects the state’s bottom line may boost your insurance rates up based on how the state orders insurers to provide compensation in an accident situation.
Specific Coverage – It also stands to reason that your rates will differ according to what you buy. Someone who buys basic liability insurance will not pay as much as someone who buys collision or comprehensive policies for covering damage to their vehicle in an accident situation. Other kinds of extras, like gap insurance (which insures your car or truck for more value than it’s actually worth on the market), and additional features like roadside assistance coverage, will also boost your premiums.
Deductibles – For some of those questions where drivers ask how other drivers keep their premiums so low, the answer may be in one word: deductibles. When you include a deductible in your auto insurance policy contract, you may end up paying much less in premiums over time. The downside is that if you get in an accident, the deductible requires you to pay out more money before the insurer would start paying in.
Your Credit Score – That’s right, even your credit score can make your auto insurance policies rise. That’s because according to current law, it’s okay for auto insurance companies to create part of your risk assessment based on how you pay off your bills.
Think about all of the above when you’re looking at your auto insurance bill.