When it comes to auto insurance, two people who seem to have similar situations could end up paying significantly different premiums. This is because insurance companies take numerous factors into account when calculating each driver’s coverage costs. Ultimately, how much you’re charged comes down how much risk there is of you filing a claim. Here are some of the most common elements providers base their decision on.
What Determines the Cost of your Auto Insurance?
1. Driving Record
This typically has the largest impact on auto insurance rates. If you have a history of traffic violations and accidents, you can expect to pay quite a bit more than someone with a clean record. The more incidents you’ve been involved in, the more likely insurance companies think you are to file a claim. Therefore, they will try to cover their losses ahead of time by charging a higher premium.
Where you live can also have a dramatic effect on your insurance costs. Residing in an area with a big population generally results in increased rates, as more traffic means there is a greater potential of being in a collision. Additionally, providers will review the crime statistics of a neighborhood to see how often vehicles are stolen or vandalized.
The car you drive makes a difference in what you pay for coverage as well. More expensive vehicles have higher repair and replacement costs, making them more of a risk to insure. Your vehicle’s safety rating is also important to providers. The better a car scores on crash tests, the less risk of injuries occurring in an accident. This usually equates to decreased rates.
4. Credit History
Many insurers use credit reports to gauge your responsibility and risk of filing a claim. Poor credit is often associated with greater risk, so a lower score could amount to higher auto insurance bills. Maintaining good credit can help you leverage a lower premium in the future.
While some factors insurance companies consider are out of your control, such as age and gender, it pays to work on the ones you can change to reduce your risk level. If you’re looking for affordable auto insurance that meets your unique needs, the professionals at Lafever Insurance Agency can help. For more than 30 years, they’ve been committed to finding Putnam County, TN, residents the best rates available without compromising on the quality of coverage. As an independent agency, they can assist you in comparing policies and prices from a variety of reputable providers. Call (931) 526-3377 to start shopping quotes.