Auto insurance rates affect a majority of people in the US, but few understand the factors that drive up costs. We’ll go over five common factors that can affect your auto insurance rates and what you can do about them.
1. What’s on your driving record
When determining your insurance rates, one of the most important elements is your driving record. Your DUIs, traffic violations, and the number of accidents that you’ve filed claims for. If you’re looking for a way to improve your auto insurance rates, keeping an excellent record is key.
A few things to keep in mind when it comes to your driving history:
- Pump the brakes. The more infractions you have, the more likely you will be marked as a “high-risk driver” to your insurance company. This could cause a price jump up to 200% of what you were originally paying.
- Time heals all wounds. Depending on the policy and the severity of the violation, you’ll be paying more for a few years at least. Some insurance companies offer accident forgiveness, making minor traffic violations and accidents could be on your record for only three years.
- File claims responsibly. If there’s ever an accident or incident where it would be necessary to file a claim, make sure you let your insurance company know.
2. What type of car you drive
Insurance companies will always base your rates on the type of vehicle you drive. If you’re cruising in a sports car or an expensive truck, for example, your rates are going to be higher than if you were driving a hatchback car that has a good safety rating. The cheapest car to insure in 2020 was the Subaru Outback, a car known for being a reliable safety pick.
Your vehicle’s safety features come into play when determining auto insurance rates. Security features such as anti-theft devices, airbags, and automatic seat belts help mitigate risk in a collision or accident, which will also affect your insurance rates.
3. Where you’re driving
Your ZIP code and state you live in will also play a part in how much you pay. According to carinsurance.com, the most expensive auto Insurance coverage in the United States is in Detroit, Michigan, where the average rate for full coverage is $6,329 a year. In Wesley, Maine, however, insurance rates are as low as $1,186 a year.
If you live in an area with a higher crime rate or more traffic, your rates will also increase. Insurance companies will often use the frequency of auto accidents in your area as a metric for determining how risky it is for you to drive there. If you spend most of your time on busy streets or highways, you are more likely to have a higher premium than someone who lives and regularly drives in rural areas with less traffic.
4. How long you’ve been behind the wheel
Your age plays a key role in determining what your auto insurance rate will be. A study by Rate Lab showed that the average insurance rate for a teenager starts at around $8,230 annually. In comparison, the average insurance rate for someone 55 years old dramatically decreases to an average of $1,389 a year.
Not only does your age matter, but the number of years you’ve been driving will also affect how much you pay. While a 16-year-old will pay more when they first start driving, by the time they’re 25 they would be considered an experienced driver. Yet if you were to start driving at 23, your rates at 25 would be a lot higher than if you started driving earlier.
5. What insurance company you use
The insurance agency you use will make or break your car insurance payments. With competitor pricing being very common in the auto insurance industry, it’s important to choose a company that has a strong reputation that you can trust.
Bethany Insurance Agency ensures that you’re well taken care of, and our experienced insurance agents will work with you to find the best deal for your auto insurance.
Contact us today and request a quote so we can get to work to best help you.
