In the United States, almost everyone who owns a car and drives it on public roads must purchase insurance (unless you live in Virginia or New Hampshire *). Rates are everywhere, and for some of us auto insurance is a huge bill.
How do you know if you are paying too much? What drives auto insurance premiums up? Let’s take a look at some of the factors that affect the price of your auto insurance.
(*In Virginia, you can pay an annual fee of $ 500 instead of purchasing auto insurance. This allows you to drive an uninsured vehicle at your own risk and does not provide coverage.
In New Hampshire, car insurance is not compulsory, unless you are in a high risk category, for example if you are:
- Convicted of driving under the influence
- A habitual offender
- Sentenced for leaving the scene of an accident
- Reinstate a suspended license
- At fault in an uninsured accident)
1. You are under 25
Drivers with less experience are involved in more accidents.
2. You are younger and male
Young men are often riskier drivers than young women. the Insurance Institute for Road Safety says guys are more likely than girls to drive more miles and engage in risky behaviors such as driving under the influence or speeding. Some states prohibit insurers from using gender to price policies.
3. You are an older woman
The table turns over the course of life. the Consumers Federation of America found that women between the ages of 40 and 60 often pay more for their auto insurance, even when they have a perfect driving record. There is no clear explanation for this, but it does happen with a number of insurance companies and in a number of states. Not all auto insurers charge women more – all the more reason to shop around when preparing to purchase a policy.
4. You are single
Married people have fewer accidents. Your rate may drop on the day you leave for your honeymoon.
5. You get tickets
If you’re cited for a traffic violation, consider driving like a slow granny for a while – your second ticket could trigger a fare increase. The insurer will ignore the first note after some time, usually three years.
Parking tickets are not reported on your driving record, so they do not affect your auto insurance.
6. You have filed a fault claim
As soon as a claim is filed against your insurance, you become a dearer customer. Expect your rates to increase, at least temporarily. However, don’t be afraid to talk to your insurance company after you’ve been involved in an accident. If you are do not at fault, your rates will not be affected.
You should be eligible for a lower rate after a claim free period.
7. You have bad credit
Auto insurers check your credit. Anything that makes you look risky is a red flag. If you have collections, liens, unpaid taxes, judgments against you, or a history of late payments, you could be paying more. Some states prohibit insurers from basing your rate on your credit score.
8. You have canceled an insurance policy
If you canceled an auto insurance policy before it expired, you could pay more to get your next policy. Insurers offer the best rates to long-term customers.
9. You have driven without insurance in the past
Driving a vehicle without insurance makes you a riskier customer.
10. Your deductible is low
The deductible is the amount you have to pay out of pocket before the insurer will cover a claim. If you have a $ 500 deductible and file a valid claim for damages valued at $ 1,500, you get $ 1,000.
Having a higher deductible will lower your premium.
11. Your car is expensive to insure
Expensive cars and luxury vehicles cost more to insure than inexpensive cars because the cost of repair or replacement is higher. Small sports cars are involved in crashes more often than family sedans, so they have higher premiums. Even if you only buy liability insurance, you would pay more to insure a large truck than a small hatchback, as the truck can do more damage in the event of an accident.
12. You have more coverage than you need
Consider the types of coverage you choose. When a car is new, full coverage is appropriate. You wouldn’t want to owe money for a car that was destroyed in an accident. If you have a car loan, the lender will likely require full coverage until the loan is paid off. But if you’re driving an older car with a lower value, consider removing collision coverage, which pays for damage to your car when you’re at fault.
Another factor to consider is the amount of coverage you are carrying. More coverage leads to higher premiums. That said, lower coverage amounts can put you at financial risk. Higher coverage limits provide peace of mind.
13. Your postal code
Some regions are more expensive than others. If you live where thefts are more frequent or where tornadoes occur every year, you could be paying more.
14. You have not requested a reduction
Contact your insurer to find out how you could reduce your premiums. Here are some situations that could qualify you for a discount:
- You are a full-time student with good grades
- Your vehicle is equipped with OnStar, LoJack or other tracking device
- Your vehicle is equipped with an anti-theft device
- Low annual mileage
- Several vehicles on the same policy
- Several policies with the same insurer
15. You haven’t shopped
Insurance rates are not set industry wide. Call a few suppliers and ask for quotes.
It’s you – and it’s them
Auto insurance rates are a dance. To keep costs low, it helps keep your file clean, choose your coverage carefully, and avoid claims. Theoretically, the insurer should give you all the discounts you are entitled to and periodically review your policy and rate. In reality, some insurance companies are not proactive in offering you the lowest price for which you are eligible. So take the reins, ask lots of questions, and make sure you’re getting the lowest possible rate on your auto insurance.