It’s a question we get all the time. Why is car insurance costs so expensive? The answer is that insurance companies consider many factors in determining your car insurance premiums, ranging from where you live to the type of vehicle you drive, and your driving habits. While this is not an exhaustive list, these are some of the factors that have the most impact on car insurance costs.
Gender, Age and Where You Live
Insurance providers consider the age of drivers not only because they tend to have less driving experience, but they also tend to have riskier habits. This explains in part why adding teenage drivers to your policy can cause your premiums to rise. The impact of age is even more significant for young men.
Beyond age and gender, you’ll pay more for auto insurance if you live in an urban area with its heaver traffic and more opportunities for collisions than you will in a quiet rural one. Even where you park your car – whether on the street or safely in a garage contributes to your premiums.
Your Personal Situation
Do you know your credit score? Did you know that having a low credit rating could mean that you pay more for car insurance costs? It does, and so does being single. Married people are considered to be more careful and therefore enjoy lower rates. However, if your profession puts you on the road frequently, then you’ll likely pay more.
Your Vehicle
Newer vehicles cost more because the replacement value is high. Also, some makes and models of cars are more prone to theft. You can do things to your car to decrease the risk, such as installing an anti-theft device.
Driving Habits – Past and Present
Of course, your driving habits will be one of the most impactful factors affecting your rates. How frequently you drive and how far you live from your workplace have a lot to do with it, as these are telling signs of how much time you’ll spend on the road and in heavier rush-hour traffic.
If your driving record is less than stellar, it won’t likely matter where you live or how often you work from home – you’ll probably pay more. Those of us with clean driving records (or those willing to change their ways) can opt-in to usage-based insurance to try to earn some discounts.
Insurance companies use a wide array of information about you and your vehicles to determine your auto insurance rates. This complicates matters when you are shopping for insurance and getting quick quotes on the internet. Talk to an insurance broker who can help you get the best car insurance rates with all of the features you need for adequate insurance protection.
