It’s not uncommon for car insurance buyers wanting to know what they are paying for when they obtain coverage. Most of the time, this is about the need for coverage – what will it cover and how good is that coverage? However, there are also people who want to know why their costs are higher or lower than others.
That comes down to what risk factors impact you, as a driver, and your vehicle.
When calculating the cost of auto insurance, your agent must take into consideration a wide range of factors. This includes things related to your driving habits and coverage needs. A good amount of the factors that play a role in your insurance premium are things you have less control over. These are things you traditionally cannot change without significant effort. When you speak to your insurance agent, he or she can provide some insight into how these areas are impacting your situation.
Keeping that in mind, consider a few of the uncontrollable factors that are playing a role in what you will pay for auto insurance.
Ask Your Agent About Your Area
One factor that plays a role in your cost is where you live. This is one of the biggest factors impacting how much you pay for auto insurance. Insurers focus on risks. If your area is a high-risk community, you pay more for auto insurance than others do. The question is, then, what makes your area a potential safe or high-risk community?
- What are the city’s crime rates? To determine how likely it is for your car to be stolen or vandalized, insurers consider these factors and compare them to other cities in your area.
- What are the city’s most common accidents? If you live in an area with a wide range of high-speed freeways, chances are good your rates will be higher than those living in a rural community. There’s just more chance of being in an accident.
It’s not likely you’ll want to move to secure a slightly lower car insurance price. Nevertheless, if you plan to move later, this could be a factor to consider.
How Do Demographics Impact You?
Your age isn’t something you can change, but it is something that matters to auto insurance companies. Marital status and gender also play a role. This isn’t necessarily about discrimination but rather about statistics on what happens to people like you.
- Married people tend to file fewer auto insurance claims than those who are single. If you are married, it could help save you some money.
- Men tend to be involved in more reckless driving and high-speed incidents than women. That can play a role in your costs, too.
- Also, if you are a very young and inexperienced driver, that makes you a higher risk. Some companies charge seniors more, too, simply because they tend to be at high risk for accidents.
Again, you can’t change these factors, but they impact your costs.
What About Your Car?
If you’re car shopping right now, you should consider insurance costs first. Most people, on the other hand, already have a car. Your insurance rates may change for factors such as these.
- You own a large and expensive vehicle. These are harder to insure because of their value – if they are a total loss after an accident, they cost much more to replace.
- If you own a vehicle that’s typically driven at high speeds, such as a sports car, you’ll pay more for insurance for it as well.
Speak to your auto insurance agent about any questions you have. As your car gets older; that can help to reduce your costs.