Personal Factors that Affect Your Insurance
Insurance companies determine how much a policy should cost by assessing numerous factors about the driver and his or her habits. Certain elements of a risk assessment are within a driver’s immediate control, such as the number of speeding tickets or at-fault collisions a person has. Other elements, however, are largely beyond the insured’s control. Here are a few surprising factors that can influence the cost of your insurance coverage:
1.) Age: Young people pay more for auto insurance than older or more experienced drivers. In general, drivers under age 25 are considered to be “high risk,” and insurance companies will charge them more as a result. Insurance costs will generally drop at age 25 and continue to stay low until the driver reaches retirement. Beyond age 65, rates begin to increase again.
2.) Gender: In general, men pay more for auto insurance than women do. This is in part because men are perceived as taking more risks and driving more recklessly. Men also tend to be involved in more car accidents than women, in part because men are often the primary drivers in a relationship. In traditional families where wives stay at home, men spend more time on the road commuting and thus have higher odds of being involved in accidents. Young men pay the highest insurance rates of any demographic.
3.) Marital status: Most insurance companies offer a discount to married couples. This is partly because married men are seen as slightly lower accident risks than single men. Insurance companies also offer discounts for holding multiple policies or multiple cars on a single policy, which caters to married couples.
4.) Credit score: According to Autoinsurancequotes.com insurance companies charge higher premiums to individuals with poor credit. In part, this is because people with bad credit are often financially unstable, which makes them more likely to report claims for minor accidents rather than pay for simple repairs out-of-pocket. People with poor credit are also seen as less responsible than those with good credit, and insurance companies may expect that monthly premiums will not be received on time.
5.) Where you live: A huge factor influencing the cost of car insurance is where the insured person lives. Premiums vary tremendously from one state to the next, and even changing neighborhoods can affect your auto insurance. There are several reasons for this. First, state insurance laws can influence insurance costs. In states where liability limits are high, for example, premiums often cost more. Additionally, the driving habits of those living around you will affect your premiums: States with high rates of drunk driving or uninsured drivers will have higher average insurance costs. Finally, living in an area with a high crime rate will affect your premiums by putting your vehicle at risk of theft or vandalism.
Although you cannot control every factor that influences your auto insurance, you can find ways to compensate. By comparison shopping for the best price and working to improve your driving history, you can counteract any rate increases caused by the above factors.
Category: Car Insurance
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