Your car insurance helps pay for any injuries or damages that might be caused by an accident. Because of the risk involved and the possible costs your premiums can be a large monthly expense.
There are multiple factors that are taken into consideration to determine your car insurance rate. These factors are combined together to understand how risky insuring your vehicle might be. While some can cause the price to be pretty low, others can really increase the rate drastically. It’s always good to understand what goes into making these decisions and try to correct them to help lower your rate.
Reasons for high insurance rates
- Where you live
Your physical address can increase your car insurance rate. If you are in a more populated area, there is a higher chance of accidents and thefts. Repairs in your area in case of an accident can also be more expensive than others. A higher rate of uninsured motorists in your area can also increase your rate.
- Your age and gender
Insuring a teenager will cost more than insuring an adult. The risk of a teenager getting into an accident is much higher. Male teenagers have a higher chance of getting into an accident when compared to a female teenagers.
- Your marital status
Being single can be a reason why your rate might be higher when compared to a married couple. When individuals become married, the risk of them getting into an accident is less.
- Your credit score
If you have a bad credit score, you are probably being effected by it and have a higher insurance rate. Insurance carriers use that information as well to determine the riskiness of your policy.
- The type of car you drive
Your car can also play a role in your rate. If you drive a classic car, you might have to get special coverage which can tend to be more expensive. The same goes if you have an expensive exotic vehicle. The cost of repairing either vehicle can be more expensive and in turn requires a higher premium.
Also size of a car can play a big role. A larger car is seen as a much safer vehicle, where as in a smaller car has a higher potential where individuals incur more injuries.
- Your driving history
Your driving history is a big reason that you might have a higher car insurance rate. If an insurance company sees that you are continuously getting tickets for speeding or other being ticketed for other reasons, they will raise your rates. You are showing to them that you are at a higher risk of getting into an accident or injuring someone else. They also have the right to cancel your premium if you have too many incidents.
- How is your car used
If you are just driving from home to work and back then you might have a lower rate. But if you are driving long distances, on the road for long periods and using your car for business as well, you could have a higher insurance rate.
How to lower your insurance rate
In order to lower your insurance rate, you have to find out which of the above could be the reason. While some of them are hard to correct, others like credit score and driving history can be fixed. They might take some time, but you can easily work on those areas to help get your rate lower.
If you feel that none of the factors mentioned earlier apply to you, then maybe start looking for another insurance provider. You should never just go with the 1st one you come across. There are multiple insurance companies out there who will fight to get your business. Try to receive multiple quotes to see who will provide a better rate.
The last thing you can do is look at your coverage options. Maybe start by increasing your deductible and see if you can lower some of the coverage amount. And always ask about bundles, like renters insurance or home insurance. And don’t forget to ask for any discounts that you might qualify for.