Have you ever wondered why car insurance rates vary from city to city? While geographic location is one factor that determines premium payments, there are several others to know. Serving High Point, NC, and the Triad area, Zimmerman Insurance Agency believes in educating their customers. Here, the team shares insights on what factors can cause automobile insurance rates to increase.

5 Reasons Why Car Insurance Rates Rise

Rate Changes

Due to overall losses, insurance companies sometimes have to increase automobile premiums. Based on their losses compared to their premiums received, the insurance industry may ask for a premium increase to cover a subsidy of losses in previous years.  If approved by the Department of Insurance, companies may increase rates as necessary. 

Marital Status

Another factor that can increase insurance rates is marital status. Single people may sometimes pay more for coverage. The theory is married couples are more financially stable and are seen as more responsible drivers.

Experience

Car insurance providers tend to view drivers with less than 3 years driving experience as high risk and will generally charge higher rates. Those under the age of 25, including teen drivers, tend to drive faster and receive more traffic infractions. This could make them more likely to get into an automobile accident.

Credit History

Depending on the status of a person's credit history, automobile insurance rates could be affected. If records show a pattern of unpaid loans, high credit card balances, and charged-off debt, some carriers may charge more for coverage.

Geographic Location

Insurance providers also look at where the driver lives when determining premium payments. Insured people who live in the city or high-traffic areas often pay more. Living in communities with more drivers increases the chances of accidents occurring.

Even though a number of factors determine car insurance rates, Zimmerman Insurance Agency will work hard to find you the best policy for your budget. The family-owned agency is committed to ensuring clients get the most affordable coverage for their vehicles without sacrificing comprehensive protection. Call (336) 883-6512 today to talk to an experienced insurance broker, and visit their website for information on their policies.