When it comes to finding an auto insurance policy, you want the most affordable rate possible. However, each insurance provider you speak with may offer completely different rates and coverage options. Though the premiums may seem strange or arbitrary, they’re based on several key factors that extend far beyond your driving history and the type of vehicle you drive. Here are the most common factors insurance agencies take into consideration when determining your insurance rate.
5 Factors That Influence Your Auto Insurance Premium
1. Where You Live
If you live in a neighborhood with a low crime rate and keep your car in a secure garage, you can expect lower insurance rates than if you lived in a different area of town. More criminal activity increases the likelihood that a driver will need to file a claim. If you are less likely to file a claim, the insurance company will end up spending less money on your vehicle. They’ll then pass these savings onto you in the form of lower monthly premiums.
2. Your Age
Younger drivers have less experience on the road and are thus more likely to file an auto insurance claim. As a young driver, you can expect to pay more for car insurance each month. However, if you’ve been on the road for years and haven’t filed many claims with your provider, you can expect your rates to be more affordable.
3. Your Credit Score
Though credit scores are not the most influential factor for insurance rates, they do impact how much you’ll pay each month. Drivers with lower scores tend to pay more for insurance than those with high credit scores. If possible, try to keep your score as high as possible. If you need to boost your score, pay down existing debts and take care to always pay bills on time.
4. Age of the Car
When calculating auto insurance rates, providers look at how much it would cost to replace the car you drive. Since newer cars cost more to replace if they’re totaled, you’ll receive a higher rate. However, if your car is over ten years old and you have no plans to replace it, your insurance premium will likely go down.
5. The Deductible
The deductible is what you pay out of pocket anytime you file a claim. The lower the deductible is, the higher your monthly premiums will be. This is because the insurance company has to pay more for each claim you file. Increasing your deductible can immediately lower your monthly premiums and make existing coverage more affordable.
If you are looking to lower premiums or increase coverage, you need an insurance company you can trust. First State Insurance Agency, with locations in Beatrice, David City, and Hickman, NE, is equipped with experienced agents who want to help you find the best auto insurance policy possible. They’ll get to know you and your driving habits to find the coverage you need at a price you can afford. Learn more online and call (402) 979-7585 for a free insurance quote today.