What Factors Affect My Car Insurance Premiums
When shopping for auto insurance, you will realize that different auto insurance companies will offer you completely different rates for the same vehicle. This is because insurance companies have to consider a lot of factors before deciding how much you will be paying in premiums. We have compiled a list of some of those factors to help you put yourself in a position to get the best rates possible:
1. Driving Record
Your driving history shows what kind of driver you are and how prone you are to accidents. If you have been previously involved in accidents or received multiple tickets, it shows that you are more likely to be involved in an incident leading to a claim. As such, insurance companies will charge you a higher premium than drivers with clean records while some may even refuse to give you coverage.
2. Driving Activity
Some insurance companies may alter your insurance rate based on what you normally use your car for, how often you use it, the distance you drive every day, where and when you drive. Obviously, the more time you spend on the road, the higher your chances of getting involved in an accident are. You may qualify for a discount if, for instance, you don't drive your car much or you never use it for work.
3. Deductible amount
A deductible is the total amount of money the insured party is ready to pay before the insurance company is obligated to pay the rest after a claim. The higher the deductible, the lower the premiums.
4. Safety Rating
Every vehicle is taken through thorough tests to determine its safety rating. A vehicle with a high safety rating is less prone to accidents and even if it gets involved in one, the physical damage and bodily injuries to the passengers are minimized. Safety features like airbags, traction control, automatic seat belts, and others make your car safer which may reduce your insurance premiums.
5. Vehicle size
Larger cars are stronger and more resistant to damage, hence a lot safer in accidents than small cars. Therefore, large vehicles with good safety ratings usually have lower premiums than small cars with similar ratings.
6. Likelihood of theft
Some cars attract thieves more than others. Thieves prefer to steal cars with few tech features and high demand for spare parts. You will pay more premiums if your car falls in the list of the top 10 most stolen cars. However, you can install antitheft features to lower your premiums.
7. Where you live
The location where you will be driving the car matters as it determines what type of risks you will be exposed to. For instance, if you live in a densely populated town, you will be at more risk of getting into an accident since there is more traffic.
8. Credit Score
Most auto insurance companies must take your credit score into account before determining your rate. According to studies, people with low credit scores are more likely to make a claim, which means their premiums should be higher.