You know you need car insurance, but how much is it going to cost you? The answer is not as straightforward as it might seem. In 2014, the average U.S. driver paid $866 per year for car insurance, although drivers in Wisconsin averaged less. Break the numbers down further, however, and you will find that females tend to pay less for coverage than males, and older drivers tend to pay much less than younger drivers. Ultimately, rates are always personalized to the driver according to individual factors, some of which are fixed, and some of which can change over time. Knowing the variables that affect the cost of car insurance can give you more insight into your car insurance premiums and give you a leg up on the prices you might pay in the future.
Factors that Influence Your Premiums
Insurance companies accumulate a lot of data about drivers when determining how much to charge for coverage. Much of this information comes from driving records, credit reports, and CLUE report, which offer a glimpse into a driver’s history, finances, and more. Insurers use this information to calculate your risk of filing future claims. Examples of information they may be looking for include:
Driving Record and Claims History
Your driving record says a lot about your behavior behind the wheel. If you have multiple speeding tickets or other violations on your record, it could be an indication of reckless behavior. Likewise, data in your CLUE report gives insurers details about past claims you have filed in the previous 5-7 years. Insurers are more concerned with the number and types of claims you have filed rather than how much they cost. If you have made multiple small comprehensive claims, for example, some insurers might penalize you more than someone with a single major collision claim.
Vehicle and Driving Habits
What kind of vehicle do you drive? Is it equipped with advanced safety features? Would it cost a lot to repair or replace after a collision? Is one of the most frequently stolen models on the road? These are the types of things insurers think about when calculating your rates. You will be asked about the make, model, and age of your vehicle, as well as your primary purpose for driving it. People who drive the most are also at higher risk of an accident. If you are retired or drive primarily for leisure, you might pay less for car insurance than someone who logs a lot of miles on the road for work.
For some insurance companies, credit plays a big role in the cost of coverage. Information in your credit report can work for you or against your rates. If you have excellent credit, you might pay significantly less for coverage than someone with past collections, late payments, or bankruptcies. While there may be nothing you can do to change the past, the good news is that most negative marks on your credit report will age off and become less influential over time.
Shopping for Coverage
Now that you know car insurance rates can vary drastically from insurer to insurer, you also know the importance of getting quotes from multiple carriers when you are shopping for coverage. You could waste time getting car insurance quotes one by one, or you could let the team here at Van De Hey Insurance shop and compare rates on your behalf.
If you are not already working with an independent agent at Van De Hey Insurance, now is the time to give us a call for your free quotes. We look forward to serving you soon.