Why Are My Insurance Rates so High?
There are many factors that go into your insurance premium. The heaviest impact is your age, driving history, driving experience, type of vehicle, and coverage requested. Other factors may include your gender, marital status, education, and whether or not you have had prior insurance. Good drivers are rewarded by paying less for car insurance because they are less likely to file a claim. Insurance companies don’t like drivers with tickets. Tickets deem you as a “high-risk driver”.
Why Are My Insurance Rates so High?
The first thing you need to do is identify the problem or likely problems. In this article, you will see a list of the top reasons your insurance is overpriced and what you can do about it. You can likely identify which of these or a combination of these are the culprit.
Problem 1: Your current Insurance carrier is not best suited for your specific situation and individual circumstance.
Solution: Shop around. Start with an independent agent that represents multiple companies. Then shop some captive agents that only represent one company.
Problem 2: Poor driving record.
Solution: Do not give them a reason to issue you a citation. Drive slower, Don’t tailgate, your pocket book will thank you.
3. Problem: Bad Credit.
Solution: You may be wondering, “What does credit have to do with car insurance rates?” Well, insurance is based on statistics. Statistics have proven that those who are responsible with paying their bills are more responsible in other areas of their life such as driving. Thus paying your bills on time will help lower your rates over time. The reverse snowball effect if you will. Insurance companies can and do predict very well the likelihood of an accident.
Why Are My Insurance Rates so High? 6 Reasons
1. Insurance rates are based on your zip code. If you live in an area with a higher population density, such as a city, your insurance rates are going to be higher than if you lived out in the country.
2. Driving record. Accidents and tickets affect your insurance premiums negatively in a huge way. Additionally, though, you are greatly rewarded when there are no car accidents or tickets in the past five years.
3. Age. The younger you are, the higher your insurance cost. The older you get, the more experience you have with driving, and the lower your rates go. Age is a major impact on the insurance rate. Depending on driving history, vehicle type, and other factors it is a possibility that rates decrease at the age of 25.
4. No proof of prior insurance. Proof of prior insurance discount is applied when someone has six months of continuous insurance without a gap just prior to the start of a new policy. Most people let their insurance lapse which will not allow the new carrier to apply that discount.
5. Full coverage versus just liability. When purchasing a new car, most likely you will need full coverage (comprehensive and collision) which will significantly impact your insurance premium.
6. Gender. Men at younger ages are statistically more likely to get into an accident than women. However, the tides will change around the late 40s when women’s insurance rates are likely to be higher than men’s.
What You Can Do to Lower Your Insurance Premium
In addition to the advice above, there are a few things you can do to lower your insurance premium. Try taking care of your credit, and also ask your insurance agent about discounts.
1. Adjust your Deductibles: Some insurance companies offer deductibles as high as $1500 for comprehensive and collision. The higher you set your deductible, the lower your monthly payments will be.
2. 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.
3. 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 |
| Prior Insurance |
| Years of Riding Experience |
| Education Discount |
| Continuous Insurance Discount |
| Operator’s Education Course |
| Operators Safety Course |
| Advanced Quote |
| Vehicle Usage & Mileage |
| Homeownership Discount |
| Paperless |
Ask about these on your next auto quote
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