Factors That Influence Car Insurance Rates

Many consumers are under the impression that if they have a clean driving history, they are sure to get the best auto insurance rates for their vehicle. This is true to some extent but not always. Let’s examine this issue in more detail.

As many of us know that not everyone in the United States have the same auto insurance rates. Insurance Rates vary greatly from company to company and geographical regions as well. For instance, two people with the same age, race, gender, ethnicity and multitude of other factors would have huge difference in the amount of money they spend on their car insurance premiums simply because they are living in two different areas of the United States or even in two different counties of the same state. For instance if you live in New York City, be prepared to pay 2-5 times more than someone who lives in a small town in upstate New York. Even though this may sound unfair, it really is not if you look at it from the insurance companies point of view. In a big city like New York, there are a lot more vehicles on the road, people drive more aggressively, and there is a lot of crime and fraud in the big cities that you don’t normally see in smaller towns that contributes to insurance companies charging more to offset the expected losses from insuring consumers.

Some other factors that also impacts your auto insurance policy rates are:

1) How old are you? – Young drivers with no or limited driving history have the highest insurance rates followed by drivers ages 55 and older. Even though older drivers have more experience behind the wheel, their driving skills deteriorates as they get older and more likely to get into accidents causing their insurance premiums to increase substantially.

2) Where you park your car at night – If you live in a safe neighborhood with low crime rates, your insurance rates will obviously be a lot less than if you were to park your car on the street in a rough neighborhood.

3) How much you use your car – If you drive your car a lot, you have higher chance of getting into accidents than if you were working from home and don’t use your vehicle as much. Less vehicle use means lower auto insurance premiums.

4) Don’t list every driver in the family to be on your insurance policy, especially the young kids who just got the drivers license. Let them get the drivers license but wait for a year or so before letting them drive or adding them to your policy.

5) Occupation matters – People with higher education normally tends to have lower premiums than people who have not. Statistically speaking, insurance companies will point out that people who have achieved higher education are more responsible safe drivers than others, thus deserve to get lower premiums.

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