Each month or year, most drivers faithfully pay their auto insurance premiums. But how are those rates determined? And what can cause them to increase? Insurance providers review several factors to come up with customized premium payments. Here are some of the common ones that are examined.
4 Causes of Car Insurance Premium Increases
1. Multiple Traffic Infractions
Speeding tickets, driving under the influence charges, and other traffic infractions can cause auto insurance rates to go up. If a driver amasses multiple tickets, insurance providers may deem them too risky and accident-prone. As a result, coverage rates are likely to be higher than those who have a clean driving record.
2. Where You Live
Where you do most of your driving is another factor for determining auto insurance premiums. If the vehicle is driven in the city or a similarly congested area, there is a greater likelihood of it being involved in an accident or even stolen. Rates could be higher than those in rural communities with fewer drivers on the road.
3. How Old You Are
Based on historical data on accidents and claim submissions, younger drivers have a higher chance of getting into fender benders. Because of their inexperience, car insurance will cost more to cover potential risks. Likewise, older drivers may have to pay more, too. Insurance companies have found that some senior citizens have slower reaction times, which can cause accidents.
4. Type of Vehicle
The year, make and model, and other factors are also considered when it comes to auto insurance rates. Historically, certain cars and trucks have more claim submissions and accidents on record. Insurance providers also look at which vehicles are more likely to be stolen and how they fare in safety tests. All of these components go into calculating premium rates.
These are just a few factors that most auto insurance companies review. Each carrier is different, and what data can be used to determine rates varies in each state. A Affordable Insurance Services in Stanly County, NC, specializes in helping clients secure reliable coverage within their budget. As an independent agency, the locally owned firm is able to compare rates at some of the nation’s leading carriers. If you’re in the market for a new policy or wonder if an existing policy is too expensive, call (704) 986-2222 for a free estimate. Check out the website for information on all insurance options, including commercial coverage for trucks.