Car insurance rates differ from insurer to insurer, sometimes quite a bit, which is why shopping around is so vitally important to finding the right company for your protection.
Rates for auto insurance are set by taking into consideration location, age, driving record, type of vehicle and much more. Premiums, or the price you ultimately pay, are determined using your car insurance rates.
Anyone who owns a vehicle in the United States puts themselves at financial risk every time they drive, because an accident may cost them an extraordinary amount of money if they are found legally liable. Auto insurance will protect you from this type of financial risk that could wipe you out. All states require either auto insurance or at least proof of financial responsibility in order for you to legally drive your car.
Car Insurance Rates And Your Location
Auto insurance rates change greatly depending on where you live. It could even make a difference as great as several thousands of dollars per year. Your risk of being involved in an accident varies greatly according to geography.
City dwellers have a much higher chance of having an accident on the roads they travel because of the sheer number of other cars on the road amongst other factors.
Car thefts are much more likely to occur in urban areas than rural ones also. Typically crime rates are high in cities and car owners are more at risk of being the victims of vandalism or car jackings also. Such events are rare in rural areas. Therefore, rates for comprehensive coverage – the type of coverage to cover theft, vandalism and certain other perils – are usually higher in densely populated areas.
Car Insurance Rates And Your Age
The younger you are the higher your auto insurance rates and the older you are the higher your insurance rates. What? New drivers who are under the age of 26, especially males, are at a very high risk of being involved in a car accident, therefore their car insurance rates are much higher than others are. In fact, they are often considered high-risk drivers.
When people get past the age of 65, statistics show that their accident risk increases again due to reaction time slowing and vision deteriorating. Therefore, in some states, depending on state laws, car insurance rates tend to increase again after the age of 65.
Education is the main option to provide some relief in each case. If younger drivers take recognized driver training courses, they may be eligible for a break on their insurance through certain insurers. Seniors who take defensive driving courses will get a discount from most insurers.
Auto Insurance Rates And Your Driving Record
This one is rather obvious. If you have tickets, accidents or other traffic offenses, including DUI (Driving Under the Influence of Alcohol or Drugs), on your driving record, it will greatly affect your insurance. Your rates will go up correspondingly, and you will pay more for coverage, until you are no longer eligible for insurance through the regular market.
Driver education courses are the only option to help your rates, once you have committed the offense. By taking such a course, you can usually get the demerit points removed from your driver’s license and your insurer is likely to forgive the offense, depending, of course, on the severity of it.
Auto Insurance Rates And Your Type Of Vehicle
The type of vehicle you buy will also affect your auto insurance rates. Some vehicles are expensive to repair and replace, therefore will be more costly to insure. Certain cars have a higher than normal chance of being stolen and consequently have higher insurance rates than others. Also the category of the car will affect the rate; sports cars are notoriously more costly to insure than sedans. This type of information is especially relevant to find out before you buy a new car.
Auto Insurance Rates And Other Factors
There are a host of other factors that heavily impact the auto insurance rates that you receive. Some of these are listed below.
- Credit Rating: Statistics show that those with lower credit scores are more likely to make claims than those with higher credit scores. Therefore, credit ratings are checked and taken into consideration when setting insurance rates.
- Vehicle Usage: If your vehicle is only for personal use, car insurance will be less than if you drive it to and from work. It will also be less if it not used for business purposes. The number of miles you drive per year and the length of your daily commute also affect your rate, because the more you drive, the higher your chance of having a car accident.
- Other Drivers: The other drivers in your home, their ages and driving records are all considered when setting your auto insurance rates.
- Gender: Men have higher car insurance rates than women.
- Marital Status: Rates are higher for single people than for married people.
While many of these are factors you can’t control, understanding the ones you can will got a long way to finding affordable policies now, and over a lifetime.
Car Insurance Rates And The High-Risk Driver
If you happen to fall into that high-risk category where most insurers refuse to offer you coverage, you still have a couple of options available to you.
- High-risk insurers: There are several companies on the market who specialize in insuring high-risk drivers, like The General. Such companies may be your best and most affordable option.
- Assigned risk plans: This is a plan by your state that guarantees coverage to high-risk drivers, however the premiums are very high and should be considered only as a last-ditch effort.
Of course, it is in your best interest to take any classes offered or any other action you can to get out of that high risk category.
Compare Car Insurance Rates Online Now!
Your auto insurance rates determine how much you will have to pay in premiums for your auto insurance coverage. To get quotes on premiums for car insurance, you can use the free quote tool at the top of this page.
All you have to do is simply input your zip code and answer a few questions about you, your driving record, your car and the coverage you need. You will quickly and easily get a variety of quotes from top insurers offering auto insurance in your area.
Get started finding auto insurance today!