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There are several
reasons that one person’s insurance may be less than another’s. While your
insurance history is one of the main factors insurance companies use to help
determine your auto insurance rates, there are other contributing factors you
should also be aware of.
Driving Record
Your driving record
is weighed heavily when it comes to determining your auto insurance premium. If
you have a good driving record you can receive a good driver discount in many
states. However, if you have a speeding ticket or an auto insurance claim on
your record, you should expect to pay higher auto insurance rates.
Family’s Driving Record
If you share an auto
insurance policy with a family member, a spouse, or a domestic partner you may
be eligible for a multi-car/multi-driver auto insurance discount. However, be
warned that combining policies also mean that you share in your family’s
speeding tickets and auto insurance claims— which means higher auto insurance
premiums.
Gaps in Coverage
Generally, auto
insurance companies consider drivers with gaps in their coverage as more risky
to insure than drivers who have maintained their coverage. Avoid causing a gap
in your auto insurance coverage, even for a day because it causes your auto
insurance rates to go up.
Your Vehicle
Insurance companies
base your auto insurance premium on the value of your car and the expense to
repair or replace it. This means that that flashy sports car or that high-end
luxury car is going to cost more to insure than a modest sedan. Lets face
it, expensive cars are expensive to repair and even more expensive to replace.
Don't forget too that drivers of flashier cars are more likely to get cited for
speeding and other violations. In certain states, you can save money on
auto insurance by having certain theft-prevention devices and safety features
installed in your vehicle.
Safety Devises
If your car has
safety devises, like side air bags, or anti-theft devices you can earn a
discount on your auto insurance. Many cars come standard with them these
days, but if the car you're buying doesn't it may very well be worth while to
invest in them. They may save more than a few dollars on your auto
insurance.
Your Zip Code
Your auto insurance
rates may vary depending on your residency. Auto insurance agencies look at your
ZIP code's loss history. This is an umbrella term that includes your
area’s claim’s history, crime rate, and number of drivers. So, if you live in an
area that has high rates of theft and claims, you can expect to pay more for
auto insurance to offset these costs. Generally, highly populated areas have
higher auto insurance rates because traffic increases the likelihood of an
accident.
If you live in an
area with a lot of traffic, your risk of an accident claim increases. The rise
of road rage in recent years only makes this problem worse. Tailgating,
speeding, and running red lights can all have disastrous results. Although being
stuck in traffic can be frustrating, it’s important to remain patient and
courteous on the road. Those who live on the other end of the traffic spectrum
can also be at risk for accidents. Inhabitants of rural areas are often faced
with extreme weather conditions and abundant wildlife, both of which can make
driving more dangerous.
Credit Score
Over 90% of U.S.
insurance companies use credit-based insurance scores to establish eligibility
for payment plans and to help determine insurance rates. Actuaries and research
analysts have found that the scores help predict your accident potential. If you
have a high credit score, you can generally expect lower auto insurance rates
than someone with a low credit score.
Your Annual Mileage
Insurance companies charge drivers with high
annual mileage more for auto insurance because they have more opportunities to
become involved in accidents and file auto insurance claims.
Your Gender
Because it’s impossible for auto insurance
companies to individually rate every customer’s driving ability, auto insurance
actuaries have to make generalizations about groups of people to help them
determine auto insurance rates. Your gender (along with other factors like
age,
ZIP Code, etc.) can generally predict how you’ll perform behind the wheel and
thus how high your auto insurance rates should be. Unfortunately, this is not
good news if you're a young male. Generally, males between the ages of 16-25 pay
more for auto insurance than females the same age. Males typically drive more
than females. The more miles you drive, the higher your chances are for
accidents and auto insurance claims. Young males take more risks behind the
wheel. Insurance companies charge inexperienced drivers— both male and female—
higher auto insurance rates since they’re more likely to file an auto insurance
claim or get a speeding ticket sometime during their young driving careers.
Young adult males push their limits behind the wheel. As a result, they’re more
likely to drive when tired and fall asleep behind the wheel.
Your Age
Young drivers
typically pay the highest auto insurance rates of any demographic, with young
males footing the largest bill. Insurance companies charge inexperienced drivers
(both male and female) higher auto insurance rates since they’re more likely to
file an auto insurance claim or get a speeding ticket sometime during their
young driving careers. Research also shows that young males take more risks
behind the wheel, hence the higher auto insurance rates. Most auto insurance
companies make young drivers wait until they turn 25 to benefit from lower auto
insurance premiums.
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