Car insurance is a necessary expense for every driver in the United States, and with the cost of cars increasing every year, it’s more important than ever. However, there are a number of factors that can affect your car insurance rates. Some of these factors you have control over, while others are out of your hands. Here are some tips to help you save on car insurance.
Driving Record
When you first apply for car insurance, your driving record is a major factor in determining the cost of coverage. For example, if you have three points on your license and live in an area with high rates of traffic accidents, you will pay more than someone with no points on their license who lives in an area with low rates of traffic accidents.
The best way to avoid this is by maintaining a clean driving record. This means that any time you are pulled over, your insurance company will know and they will be able to assess the risk level associated with your driving record and adjust the premium accordingly.
Age
One of the most significant factors that can affect your car insurance rates is your age. Drivers between the ages of 16 and 19 typically pay more because they are more likely to get into an accident than the typical drivers. According to the Centers for Disease Control and Prevention (CDC) “Per mile driven, teen drivers aged 16–19 are nearly three times as likely as drivers aged 20 or older to be in a fatal crash.”
Type of vehicle you drive
The type of vehicle you drive has an impact on your car insurance rate. If your vehicle is more expensive to repair and you don’t have comprehensive car insurance, then you could be paying more than someone who drives a cheaper car with comprehensive coverage. If you’re looking to save money on insurance, then you should consider driving a less expensive car with comprehensive coverage.
The area where you live
Where you live can have an impact on your insurance rates. For instance, if you live in an area with a high crime rate or high car accident rate, then your car insurance premium may be higher because those factors are considered when calculating the risk of having a car accident. For example, living in a neighborhood that has a high rate of stolen cars or auto break-ins will result in more expensive insurance rates because the likelihood that you’ll need to file for insurance after the fact will be increased.
Coverage package you choose
If you are going to drive, you need insurance. But, in the past few years, it has become a lot more complicated than just choosing a policy. Car insurance is broken down into three main coverage considerations: comprehensive, collision, and liability. Each of these three considerations will result in different rates and deductibles so it’s important that you understand what each policy covers before deciding which one is best for your needs. To learn more on different types of auto insurance read our previous article here.
Credit rating
Understanding how your credit score affects rates will help you get more value out of your money. If you have a low credit score, it will likely mean higher premiums. This is because lenders will use other data points, like driving record and age, to determine whether or not they’ll give you a loan or offer you car insurance. Lenders look at these variables when deciding whether or not they’re willing to lend their money to someone with a low credit rating. Lenders are able to make this decision based on their own risk assessments and the potential for revenue loss if borrowers default on loans and car insurance policies. They do this in order to stay within their guidelines for risk level.
Employment status.
It’s not enough for you to have a good driving record. If you’re employed, your employment status can also affect your car insurance rates. Employment status can change your car insurance rates. If you are unemployed, the risk of theft and accident goes up. If you have a profession that puts you at risk for accidents, your rates will increase. If you’re thinking about switching jobs or changing employers, the car insurance company can see that as a risk factor also. You should always be honest with your insurance company about any changes in employment status. So make sure that if you switch jobs or change employers, your car insurance company is notified beforehand. That way, they’ll be able to adjust your rates accordingly and reduce the chances of having to pay more in the future!
Conclusion
If you are looking to save on your insurance rates, it’s best to shop around and find the best deal while also saving money. Car insurance rates can be affected by a number of factors that are out of your control. Regardless of how the above 7 factors impact your insurance rates, E&Y Insurance Agency is able to compare the price and coverage from many different insurance companies and then help you select the insurance company that best meets your needs. Give us a call today at (248) 362-1313 or fill out the contact form below.
