Common Reasons for High Car Insurance Expenses
If your car insurance rates seem high, there could be reasons for it. In general, insurance companies charge higher rates for higher liabilities. In other words, the more likely it is that they’ll have to pay a claim, the more they’ll charge you every month. But there are certain factors that could make your car insurance more expensive.
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Keep reading to find out the top reasons.
Young drivers pose a high risk to insurance companies. This usually means high rates. Boys tend to pay much higher rates than girls. The Insurance Institute for Highway Safety claims that teens ages 16-19 are at the highest risk of causing a fatal car accident than older drivers.
Typically, you’ll pay what feels like inflated car insurance rates until you are 25-years old. Then, insurance rates tend to fall because your risk of making impulsive decisions or taking chances diminishes. Insurance companies feel you are a lower risk as you age.
Where you live plays a role in your insurance rates too. For example, if you live out in a rural, low-crime area, you’ll pay low insurance rates. If you live in a high-crime city area, though, you may pay much higher rates. Again, the risk of a claim determines your premiums. A high-crime area puts you at higher risk of theft and vandalism. The insurance company needs to make up for this risk by charging higher premiums if they want to stay in business.
You Don’t Bundle Your Insurance
If you have your home insurance with one agent, car insurance with another, and life insurance with yet another agent, you aren’t getting the bundle discount. Think of it as a loyalty discount. The more policies you have with an insurance company, the less they will charge you. They want you to stay a loyal customer, keeping their policies for many years.
If you have policies with different agents, see what you can do to consolidate. Typically, the largest discount occurs when you have your home and car insurance with the same agent. But, check with your insurance agent to see what other discounts you may get.
Your Driving History
It pays to be a safe driver. Insurance companies check your driving record. If you have a history of tickets or accidents, you may pay higher premiums. Again, drivers that take chances put the insurance company at a higher risk of paying a claim.
Any tickets you receive will be a part of your driving history. One ticket doesn’t mean you’ll definitely have higher premiums, but it might. It depends on the reason for the ticket. Did you park illegally? That may not have much of an effect. Were you drag racing or texting while driving? These incidents could cause your rates to rise because they increase your risk of causing an accident.
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Your Insurance History
Insurance companies look at your past insurance claims. They use this to predict how likely you are to file a claim in the future. The type of claim does make a difference, but your premiums will likely still increase. This means even if you file a claim for an accident that wasn’t your fault, you may still pay higher premiums because you were in an accident.
The Car you Drive
Insurance companies have insurance rates for each make and model of a vehicle. If you choose to drive a racy red sports car, expect to pay much higher premiums than if you drove a Honda Accord, for example. Before you buy a new car, check with your insurance agent. They have ratings based on the likelihood of speeding in the car, its safety features, and its likelihood of being stolen or vandalized.
The Miles you Drive
Your insurance agent needs to know your regular driving habits. How far do you commute to work? How many miles do you drive per year? The more miles that you drive, the higher your chances of being involved in an accident become.
Who Drives Your Car?
Finally, the people that drive your car play a role in how much the insurance costs. If you have a 16-year old child driving your car, your rates will increase. If you have a husband with a poor driving history on your insurance, your rates will increase.
Auto insurance rates, in general, are on the rise, but you can help lower your rates. Know the risk factors that increase insurance rates and see if you can fix anything. You want to portray yourself as a low-risk driver that drives a safe car and minds the rules of the road for the best rates.
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