Why is my car insurance so high?

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Car insurance costs reflect you in some way, and the rates you pay depend on factors such as your driving experience and where you live. If your premiums seem to be too high or have risen sharply in recent months, there are many possible reasons. Fortunately, there are ways to lower these premiums.

Key findings

  • How much you pay for auto insurance depends on many factors, including your driving experience, your vehicle, and where you live.
  • Your credit score can also affect your insurance rates.
  • You may be able to lower your costs by taking safe driving courses or shopping at a better price.

What determines how much you pay for auto insurance?

While virtually every state requires drivers to carry a certain minimum amount liability coverage, drivers have a lot of flexibility in choosing the amounts and types of coverage on their car policies. Americans paid an average of $ 1,674 a year, or $ 139.50 a month, for full car insurance, according to a recent analysis by the Bankrate.com website. what including liability insurance, full insurance, car accidents and insurance for uninsured / underinsured motorists.

But this is, of course, only an average, and the price you pay can be higher or lower, depending on many different factors, such as:

  • Your driving experience. When you ask a car insurance company for a quote, one of the things they look at is your driving records, which may include any traffic fines you have received for traffic violations or accidents you have been involved with. you will love the lower premiums. The converse is also true; If you have a history of accidents, DUI, or other examples of bad road behavior, your rates will go up.
  • Where do you live. Insurance premiums can vary widely from state to state and even from place to place within the same state. For example, if you live in an area with a high crime rate, your insurer may charge a higher rate because it thinks you are more likely to file a lawsuit for theft or vandalism. Maine has the lowest full coverage rates at $ 965 per year, while Louisiana is the most expensive state at $ 2,724 per year, according to the study mentioned earlier.
  • How old are you. Younger and less experienced drivers tend to pay higher auto insurance rates because they are thought to be more likely to have an accident than older motorists. If a young driver is on a parent’s car policy, this can also affect what the parent pays.
  • Your gender. Women tend to have fewer and less serious car accidents than their male counterparts, so they usually pay less for insurance.
  • Your credit score. The relationship may not seem as obvious as some of the other factors, but it has a higher credit rating often results in lower car insurance premiums. This is because many auto insurance companies use your credit rating as an indicator of how responsible you are.
  • Your car. If you drive a super expensive sports car, your insurance rates will be significantly higher than if you were driving in a sensible sedan. This is because repairing or replacing the former will cost more than the latter after the accident. The equation also includes your vehicle’s overall safety metrics and specific safety equipment. And, according to the Insurance Information Institute, “Insurers not only look at how safe a particular vehicle is to drive and how well it protects passengers, but also what potential damage it can cause to another vehicle. the higher the likelihood of damage in the event of an accident, the insurer may charge more for liability insurance. “

Tip

Even if you don’t think your auto insurance premiums are prohibitive, it’s worth shopping every year or two to see if another insurer will charge you less for the same coverage.

What You Can Do To Lower Auto Insurance Rates

Drive carefully. If you avoid troubles on the road and do not make any serious claims with the insurer, your rates may drop over time. Many insurers now use telematic technologies control the speed, acceleration, braking and other factors of drivers and reward them with lower rates if they practice safe driving. If you’re happy with that, it might be worth checking out.

Raise your credit score. Since your credit rating is often an important factor in setting your insurance rates, anything you can do to improve it can pay dividends. Investopedia has this advice for how to improve your credit score

Take the class. Many auto insurers offer lower rates if you are visiting an approved safe driving course… You may also need to take a course if you are involved in a DUI or other wrongdoing.

Consolidate your insurance policies. You may be eligible for a discount if you buy your car, homeowners policy, or other policies from the same company.

Take a closer look at the shops. The auto insurance industry is competitive and companies are looking to attract new customers. There are many websites where you can enter your information and compare prices. If your premiums have gone up lately, it might be worth contacting your insurance company or agent to find out why. If they want to keep your business, they may have offers, such as other discounts that you are eligible for, to lower rates.

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