Car Insurance Rates

Car Insurance Rate Factors

Several keys factors determine your automobile insurance rate, including:

• Age and gender: Statistically speaking, a young man is more likely to get in an accident than a middle-age woman.

• Geographic location: The more cars on the road, the greater the chance of accidents. Drivers in rural areas often have lower car insurance rates than drivers in large metropolitan areas simply due to the number of accidents that occur. Annual weather patterns play a role, too, with residents paying more in areas that have dangerous winter weather.

• Driving history: A driver with speeding tickets and other traffic violations is a higher risk to insurers.

• Type of car: Cars that are expensive to repair, are often stolen or vandalized, or are typically driven fast send up red flags at insurance companies.

• Credit history: Whether or not you think it’s a valid factor, car insurance companies view your credit report and make judgments about you based on your past credit performance.

• Use of vehicle: driving your car 80 miles a day in heavy traffic is a greater risk than someone who drives just twice a week to pick up groceries.

• Type of coverage: many policies offer optional coverage, such as ‘loss of income coverage’, which would financial assistance during your recovery from an accident, or ‘physical damage coverage’, which pays for repairs your vehicle if an accident is your fault. These options, however, increase your car insurance rate.

Lowering Your Car Insurance Costs

Many car insurance companies provide discounts to loyal and repeat customers, but you might have to ask about them. Discounts are often provided for:

• Having multiple drivers or vehicles on a policy
• Installing anti-theft devices to your vehicle
• Students with good grades and are listed on their parents’ policy
• Adding safety features like daytime running lights and airbags to your vehicle

You can also keep insurance costs down by choosing higher deductibles. A deductible is the amount you pay to repair or replace your vehicle before the insurance coverage takes over. If your car is in an accident that will cost $900 to repair and your deductible is $200, you pay the $200, and the insurance company covers the other $700. By raising your deductible, your insurance company will lower your car insurance rate since you are taking over some of the burden, but be careful not to make a deductible so high that you can’t afford it in the event of an accident.

Shopping for Car Insurance Rates

There are many avenues available for purchasing car insurance, from direct online sites like Geico and Progressive to meeting with a local agent from a company like Allstate. A good starting point is an online service that will compare rates at popular insurance companies for you. After spending a few minutes at InsWeb or CarInsurance.com, you will have a list of car insurance rates based on your individual needs. You can also change your criteria to see how different coverage choices affect your rate.

When working a company online or in person, make sure to ask about any discounts they may offer and what factors can change your rate. Also, be sure to get car insurance quotes in writing, whether that means printing out the pages from your computer or having an agent fax you a list.

It’s a good idea to shop around for car insurance rates at least once a year, but if you’ve moved or bought a new car, you should definitely do some comparison shopping. Although it’s tempting to stay with the same, familiar company, you could save hundreds of dollars with a new policy that gives you the coverage you need.