There are many mysteries in the world. How your credit rating is determined is one of them. The Loch Ness monster is another. What affects your auto insurance rates is a third.
Knowing what affects your auto insurance rates – and how to get the best rate you possibly can – is not as hard as it seems. The key is to understand that several factors are considered to determine insurance rates, some of which you can control and some you cannot.
What Auto Insurance Coverage Do You Really Need?
Determining the type of coverage that you need for your car insurance plays a role in the cost of your insurance premiums. Your independent insurance agent can help you determine an appropriate deductible amount for your car.
If you own a ’99 Honda, you probably don’t need $20,000 coverage on your car. No one would pay you more than your car is worth even if it was totaled in an accident. Insuring a brand new Cadillac, though, is going to cost you far more than insuring that late-model Honda.
Is Low Liability Coverage Really a Good Idea?
The cost of your liability coverage will affect your auto insurance premiums. Some people think they can save money by choosing minimum liability coverage. They may not even know what liability coverage means, but they want to do what it takes to pay less for insurance.
Liability coverage is the foundation of car insurance; it protects against bodily injury and property damage in the event of a car accident. If you have minimal liability coverage and you cause an accident in which someone else is seriously injured, your insurance may not cover all the costs of their medical needs. You may end up getting sued and losing whatever personal assets you have. With that scenario in mind, higher limits on your liability coverage may be a good idea.
Your Credit Rating Is an Important Factor
Your credit rating may seem like one of life’s mysteries, but it’s smart to understand it since it can be one of the biggest factors used to determine what you pay for car insurance. Insurance companies have learned that drivers with higher credit scores tend to be less likely to file car insurance claims. The lower your score, the more car accidents you may have. Though it’s not as easy as this sounds, if you improve your credit rating, you can lower your car insurance rates.
High Accident and Crime Rate Areas Affect Auto Insurance Rates
If you live in a city or in the country where accident rates are high or where crime is a concern, this will affect the cost of your auto insurance. People who live in areas that are considered safe may pay less.
Your Accidents and Driver’s Record Affect Car Insurance Costs
Insurance companies take into account your driving record when determining the cost of your auto insurance premiums. High-risk drivers have to pay more for their insurance. If you have had a number of moving violations or if you have been arrested for DUI, your insurance rates will likely climb. If you have had several accidents where you were at fault, you may not even be able to get insurance from some carriers.
Do You Have a Safe Driving Record?
If you have not been involved in car crashes or had any moving violations, the insurance companies tend to favor drivers like you. They may offer you discounts including the vanishing deductible discount, which reduces your deductible by a certain amount for every year that you do not file a claim.
Safe Driver Courses Can Lower Insurance Costs
Taking a safe driver or defensive driving course online or in the classroom may lower your insurance, depending on your own individual situation. In some states, passing the save driver’s course may result in a 10% discount in your insurance rates for three to five years.
If you have had a moving violation, taking the safe driver’s course may help you avoid an insurance rate increase.
Are You a Single Male under 25 Years of Age?
Young men under the age of 25 are considered the riskiest of all drivers. If you fall into this category, you might want to buy a “conventional” car since car insurance companies pay attention to the type of car that young men drive. You may want to wait on the Audi Sports car until after you turn 26.
Learn More Car Insurance Tips – Contact The Andrew Agency
Find out what will affect your own insurance premiums in Virginia, Maryland or South Carolina. At The Andrew Agency, we will take a look at the big picture and help you find the right car insurance for you. Contact us at (804) 320-2886.