- Why is Car Insurance So Expensive? Understanding Rating Factors
- Does insurance ever get cheaper?
- Why is Car Insurance So Expensive? How Your Credit and Insurance Score Affect Your Rates
- Why is Car Insurance So Expensive? – Inflation
- Action to take Now
- What factors contribute to high car insurance costs?
- How can I lower my car insurance expenses?
- Need help understanding car insurance expenses?
- Why is car insurance so expensive for 20-year-olds?
- INSURANCE SERVICES WE OFFER
- FAQs About Why Car Insurance Is Expensive at A Plus Insurance
Why is Car Insurance So Expensive? Understanding Rating Factors
If you are wondering why is car insurance so expensive, there could be multiple reasons at play. First off, it’s good to understand the rating factors that car insurance companies use to determine an individual’s auto rates. It could be possible that one or more of these factors are the reason your auto rates are high.
There are 6 major factors that go into making your car insurance rates. These factors include your marital status, age, gender, zip code, driving record, and vehicle characteristics.
- Marital Status-If you are a married individual most companies will offer a discount for this.
- Age-Your age is a factor due to your driving experience, if you are a youthful driver your rates will be higher in comparison to drivers over the age of 25.
- Gender– This is a highly debated topic, but the fact is, gender still plays a factor in most states in the U.S. The reason is females pay less for their auto insurance than males, who are statistically a higher risk.
- Zip Code/City-Your zip code is a big factor with rates due to the level of population in your area. The higher populated a city is, the higher your rates will be.
- Driving Record-As you might have guessed, if you have accidents, tickets, or even minor violations on your record, your rates will be higher.
- Vehicle Characteristics-Lastly, your vehicle’s characteristics are important due to the value of your vehicle. The newer the vehicle, the higher the cost it will be to insure that vehicle.
Many factors are out of your control…age, gender, marital status, and even zip code. But thankfully, there are things you CAN control, such as your credit and insurance score.
Does insurance ever get cheaper?
Does insurance ever get cheaper? Car insurance rates can vary based on several factors, but it’s not uncommon for rates to decrease over time. Factors like a clean driving record, completing defensive driving courses, or aging out of higher risk demographics can contribute to lower premiums. Additionally, maintaining a good credit score can often lead to cheaper insurance rates. However, it’s essential to regularly compare rates from different insurance companies to ensure you’re getting the best deal. Here’s a comparison table showing estimated monthly rates for different insurance providers in Colorado:
| Insurance Company | Estimated Monthly Rate ($) |
|---|---|
| Progressive | $120 |
| Dairyland | $140 |
| Gainsco | $150 |
| Assurance America | $130 |
| National General | $135 |
Remember, rates can vary based on individual factors, so it’s crucial to get personalized quotes for the most accurate pricing.
- Keep a clean driving record.
- Complete defensive driving courses.
- Maintain a good credit score.
- Compare rates regularly from different insurance companies.
Why is Car Insurance So Expensive? How Your Credit and Insurance Score Affect Your Rates
Here is an example of some of our insurance providers and how a bad credit score can affect your rates!
| Insurance Company | Average Rate: Bad Credit | Average Rate: Good Credit |
|---|---|---|
| Dairyland | $145 | $139 |
| Bristol West | $150 | $140 |
| National General | $150 | $138 |
| Progressive Insurance | $152 | $129 |
| GAINSCO | $165 | $157 |
If you have a credit score below 670, this is considered a bad score. An insurance company will conclude that a bad score means someone will not be reliable in making their monthly payments, and this will mean higher monthly rates than a person with a good credit score.
While the impact on your rates can be significant, all hope isn’t lost for someone with bad credit! Besides working hard to improve your credit score, there are discounts you could still be eligible for. You can also pay your insurance premium in full, which will cut down on the overall cost of insurance as opposed to paying monthly.
If you are wondering why is car insurance so expensive after the agent ran a report for your insurance score, it might mean your credit history isn’t so great. Your insurance score can impact your rates in a negative way, or a positive way, so be sure to be responsible with that score if possible!
This means you should NOT switch from insurance company to insurance company, or cancel a policy with unpaid premiums.
Having prior insurance for at least 6 months can mean the difference between paying $30 to $50 more each month.
Why is Car Insurance So Expensive? – Inflation
Premiums can increase for many different reasons. In today’s day and age, inflation is a huge reason why rates are increasing throughout the U.S.
Other reasons include rate increases per area due to an increased amount of claims, or accidents. Changing your address to a higher populated zip code can also increase your rates. And, of course, if you find yourself with a new speeding ticket, or an accident this will also affect your rates in a major way.
Inflation can also be attributed to the pandemic as well. Does Covid-19 possibly have anything to do with car insurance?
Driving behavior has returned to pre-pandemic levels, contributing to the high amount of accidents and claims this year.
The cost to repair and replace vehicles has also skyrocketed. Have you heard about the chip shortages? It’s so bad that car manufacturers are even shutting down plants. It’s madness! And it’s directly affecting auto insurance costs.
Action to take Now
In addition to the above suggestions, such as taking care of your credit, and asking your insurance agent about discounts, there are things you can do to help reduce your auto insurance premiums.
- Adjust your Deductibles: Some insurance companies such as Progressive offer deductibles as high as $1500 for comprehensive and collision. The higher you set your deductible, the lower your monthly payments will be.
- Individual Driving Programs: Progressive uses a program called Snap Shot, National General utilizes something called Dynamic Driver, and you may have heard of Travelers’ program called Intelli Drive. These programs monitor driving habits and offer up to 30% off the total premium if you have data to show your good driving habits.
- Discounts: We can’t stress enough, ask your agent about potential discounts. Something as simple as going paperless for example can knock up to $50 off your entire premium. Take a look at the following discounts and see what you might qualify for:
| DISCOUNT OPPORTUNITIES |
|---|
| Paid in Full Discount |
| Multi-policy |
| Association membership |
| Anti-lock brakes |
| Prior insurance |
| Years of riding experience |
| Prompt payment |
| Education discount |
| Garaged or locked storage |
| Continuous Insurance Discount |
| Operator’s Education Course |
| Operators Safety Course |
| Advanced quote |
| Vehicle usage & Mileage |
| Approved safety course |
| Homeownership Discount |
| Paperless |
Ask about these on your next auto quote
What factors contribute to high car insurance costs?
Several factors can impact car insurance costs, including the driver’s age, driving history, location, type of vehicle, coverage levels, and insurance company’s risk assessment.
How can I lower my car insurance expenses?
To lower car insurance expenses, consider options like maintaining a clean driving record, bundling policies, increasing deductibles, improving credit score, or shopping around for better rates.
Need help understanding car insurance expenses?
Feel free to call us at 1.888.445.2793 for assistance with understanding car insurance expenses. Our team is here to help you with your insurance inquiries.
Why is car insurance so expensive for 20-year-olds?
Car insurance is often expensive for 20-year-olds due to their limited driving experience and higher perceived risk by insurance companies. Young drivers are statistically more likely to be involved in accidents, leading to higher premiums. However, you can explore options like good student discounts and safe driving courses to potentially lower costs. For personalized advice, contact us at 1.888.445.2793.
INSURANCE SERVICES WE OFFER
Homeowners Insurance
Homeowners, renters, and mobile home owners: make sure you have the protection you need.
FAQs About Why Car Insurance Is Expensive at A Plus Insurance
What factors contribute to the cost of car insurance?
Several factors can impact the cost of car insurance, including your driving history, the type of car you drive, your location, and more. To understand why your car insurance is expensive, contact our office at 888-445-2793 for guidance.
Are there ways to lower my car insurance premiums?
Yes, there are strategies to potentially reduce your car insurance costs. These may include bundling policies, maintaining a clean driving record, and exploring available discounts. To learn more about lowering your premiums, contact our office at 888-445-2793.
How can A Plus Insurance help me find more affordable car insurance?
A Plus Insurance specializes in helping clients find cost-effective car insurance solutions. Our experienced agents can compare rates from multiple insurance companies to find you the best options. Contact our office at 888-445-2793 for assistance in securing affordable car insurance.
Last Updated on by Camron Moss