Do you know the factors that influence your car insurance rates the most? Do you know why car insurance quotes can vary so much from insurer to insurer? Often, the elements that make up car insurance premiums can seem somewhat mysterious. Today, we are breaking down several of the variables that car insurers pay the most attention to and what you can do to minimize your costs.
Your Personal Record
Insurance companies are very interested in your past driving record and history of claims since they are often an indication of your future behavior. Your CLUE report and your driving record divulge a lot of information about your time behind the wheel, including traffic citations, car accidents, and all of your recent car insurance claims. Having multiple claims, citations, or accidents on your record can result in higher premiums. On the other hand, having a spotless record could qualify you for special discounts, such as a safe driver discount or a claims-free discount.
Your Vehicle and Driving Habits
The vehicle you drive can play an important role in the amount you pay for car insurance. Some cars cost more to repair or replace, whereas others tend to be at higher risk of being stolen. Your insurance company will want to know what type of car you drive, how old it is, and the types of features it has. In many cases, insurers will award you with a discount for driving a vehicle equipped with airbags or an anti-theft device.
Also, insurers will also want to know about your driving habits. The risk of an accident goes up with each minute spent behind the wheel of your car. If you drive several hours per day for work, you may pay more for coverage than someone who is retired or only drives for leisure purposes.
Your Credit Report
Your credit report contains a lot of personal information, and insurers can use it to assess your risk of filing a future claim. If you carry a lot of debt or have a history of bankruptcies or late payments, you may be perceived as a higher risk driver. Keeping your credit score in good standing may help you qualified for preferred rates with your insurer.
Teen Drivers Pay More
Experience is the best teacher, and that goes for driving, too. Teen drivers have long been among the most dangerous drivers on the road due to their inexperience. Since statistics show they are nearly three times more likely to crash than older drivers, they are also more expensive to insure. If you have a teen driver on your policy, expect to pay higher premiums regardless of their claims and driving record. However, be sure to ask about discounts for students who maintain good grades in high school and college. Also, remember the higher rates are not necessarily permanent. As young drivers get more experience behind the wheel, insurance costs start to taper off–usually between ages 21 and 25.
Other Cost Variables
Other factors can drive up the cost of insurance across the board, even if they are outside of your control. For example, the cost of car insurance has spiked an average of 16 percent since 2011 due in part to a higher rate of distracted drivers on the road. You could also be penalized if you live and park your vehicle in a high-risk area where there are elevated rates of theft, vandalism, accidents, weather-related damage claims, or even run-ins with wildlife.
Overcoming Insurance Cost Obstacles
It is important to remember that negative influences in your risk profile do not necessarily doom you to higher insurance rates. In many cases, our team can help you find discounts or get matched with an insurer that places less emphasis on the variables that are otherwise working against you. If you are not yet working with an independent agent here at Pentagon Insurance Agency, call us today to request your free quotes. We look forward to serving you soon.
Peter Cole, insurance agent and partner at Pentagon Insurance Agency in Elk River, MN, began his career in the industry more than 30 years ago. He prides himself on backing up every sale by personally providing service to his clients and by providing the coverage they need at the best possible price.
Contact Peter to discuss your situation today!