Car insurance premiums can seem like they change like the wind sometimes. It is hard to know what exactly caused that increase or decrease or initial amount. However, we have some tips to help you understand the factors that go into that premium you pay. Where you live, coverage amounts, driving record and your age can make a big difference in what you pay. Each insurance company has their own system, but here are a few of the reasons that impact your premium.
What Impacts My Car Insurance Premium?
- How many miles you drive–How many miles you drive in a year can impact what you pay. If you don’t drive much you will get a discount for low mileage. If you drive a lot you will pay a higher premium. Stop and think about that and it make sense because the people who are on the road more are paying more because they are statistically more likely to be in an accident. The low mileage discount can vary among companies and most will audit your mileage so be honest and let your agent know how much you drive.
- Where you live– If you live in a bigger city or highly concentrated population area then you will pay more than those that live in a more rural area. You pay more when you live in an area with more traffic. Insurance companies also keep data on thefts in areas and that can factor into your cost as well. Higher claims in a location will result in higher premiums.
- Your driving record– If you have an accident or traffic violation your insurance rate is usually directly affected. It isn’t any fun and just adds salt to the wound, but again it goes back to statistics. If you have a poor driving record you are more likely to have more claims which increases your rate. If you have had a run of bad luck remember those accidents do eventually come off of your driving record. Once they do you will see your premiums go down in most cases.
- Your age- teens and anyone over 65 beware. As you start to drive you will see higher premiums. Then you will see your rates get better in your late 20’s, 30’s, 40’s, 50’s and early 60’s. Then you will start to see increases again in your late 60’s. It may not seem fair and you may be a great driver, but statistics are not on your side.
- Your car choice– If you choose a sports car or very expensive car then you will pay more insurance. If your car does not have good safety reviews then your insurance will cost more. It is always a good idea to check with your agent before buying a new car to see what the insurance will cost. You don’t want to be surprised.
If you noticed a trend of statistics impacting your rate then you would be right. Insurance companies use a lot of numbers and data to come up with your rate. Each company is a little different and it is a little bit of a mystery for you and for us. We know these factors do tend to impact your rate. Talk to your agent and stay informed. Ask questions and make sure you are getting all the discounts that you might qualify for on your policy. Be safe on the road. Be prepared if you buy a new car for a different premium. The more you know about your insurance the less intimidating it will be when you need to talk about it with your agent. We hope that you feel comfortable with these factors that impact your price! Happy driving!