Factors Affecting Your Car Insurance Rate

As a responsible motorist, you understand the importance of carrying the right car insurance. These policies can establish versatile and robust financial protection while helping you satisfy legal obligations. However, purchasing and maintaining the right policy may also seem like a significant expense. With this in mind, take time to understand how the following factors may impact your rates:

Location. Where you live and travel significantly impacts your auto insurance costs, as high-traffic areas and those with greater crime rates are considered riskier.

Vehicle details. Insurers analyze the car’s make, model, age and value as they determine your risk levels and the potential cost of repairing or replacing it.

Insureds’ circumstances. You may list multiple parties on your auto insurance policy, such as your spouse and children. However, the ages of all insureds may influence rates. As such, teenage drivers may lead to higher costs.

Driving records. Traffic violations and accidents can make you appear riskier to carriers, leading to increased rates. Conversely, having a clean driving record may help you earn discounts.

Claims history. If you haven’t filed a claim against your auto insurance for an extended period (e.g., 3 or 5 years), you may be quoted discounted rates. On the other hand, if you’ve filed multiple claims in recent years, it may be more difficult to find affordable auto insurance.

Vehicle use. Personal auto insurance policies don’t cover business activities, like driving for Uber, DoorDash, or similar sharing economy services, which may blur the lines between commercial and personal insurance. As such, the sharing economy creates new variables for determining liability. This increases the risk for an insurance company, which may choose not to insure risks with this exposure.

Telematics. If you agree to the use of telematics, which car owners sometimes do to receive an upfront discount, you’re allowing your insurance company to collect real-time data on your driving behaviors. By analyzing data, insurers gain a more accurate understanding of risk. Hylant recommends the use of telematics because it is only used for the first 90 days of your initial policy period and will only be used to offer additional discounts. There is no risk of telematics increasing your annual premiums.

Policy details. Various specifics of your coverage, such as your deductible amount, may influence your premiums.

Fewer insurance companies. A decrease in the supply of insurance companies may lead to an increase in premiums.

Contact us today to learn more about auto insurance and ensure you have suitable coverage at an ideal rate.

Related Reading: Time to Take Your Adult Children Off Your Auto Policy

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.