Auto insurance costs can vary greatly from driver to driver, which means you might notice you’re paying significantly more or less than other people you know. Though it might seem like premiums are assigned at random, insurance companies put careful consideration into how much they charge each motorist for coverage. When you shop for a policy, providers use a variety of factors to identify your risk of filing a claim, ultimately determining what your rate will be. It’s helpful to understand where your premium comes from so that you can do whatever’s possible to reduce it.
What Factors Determine Your Car Insurance Rate?
1. Driving Record
The top factor that affects car insurance costs is a person’s driving record. The cleaner the record, the less they can expect to pay for coverage. Even minor traffic violations can cause your premium to increase a considerable amount. The number of claims you’ve filed will also be taken into account.
2. Credit Rating
In North Carolina, credit scores are often reviewed to help evaluate a driver’s risk level. Many insurance companies believe there is a correlation between credit ratings and the number of claims a motorist is likely to file. With a high credit rating, your chances of being rewarded with discounted auto insurance improve.
3. Type of Vehicle
The type of vehicle you drive also matters when it comes to pricing your insurance. Different makes and models are considered a higher risk to insure based on their average repair costs, safety rating, and likelihood of getting stolen. Typically, more expensive cars attract higher rates.
4. Amount of Coverage
The amount of protection you decide to purchase will have a significant impact on your premium. The more coverage you add to your policy, the higher your rate will go. However, the cost for additional coverage can far outweigh the consequences if you are involved in an accident and don’t have enough insurance to cover your expenses.
5. Driving Experience
Those who have years of driving experience behind them generally get better auto insurance rates. This is because insurers view young, inexperienced drivers as the highest risk of getting into an accident. To mitigate their own costs, insurance companies will usually charge more if you’re under 25.
The easiest way to find auto insurance that provides adequate protection at the best value is to work with an experienced insurance agent. The professionals at Randolph County Farm Bureau are dedicated to helping North Carolina residents make informed decisions about coverage. They offer high-quality products and unparalleled customer service to ensure each client ends up with the right policy for their unique needs. Call the Asheboro office at (336) 629-9187 or the Randleman location at (336) 822-9573 to request an insurance quote, or visit their website to learn more about their products.