Auto insurance premiums can seem totally arbitrary, especially when different carriers offer totally different rates for the same coverage. However, those prices actually reflect complex calculations based on reams of data used by insurers to determine how likely you are to file a claim. Once you understand the basics of how auto insurance rates are calculated, you can take steps to reduce your premiums without sacrificing coverage.

5 Factors That Influence Auto Insurance Prices

1. Your Driving History

Insurers generally assume that a driver with speeding tickets, DUIs, or other violations on their record will be more likely to cause a potentially expensive accident. Fortunately, if you already have some tickets on your record, taking an approved driver safety course can get points taken off your license and lower your premiums.

2. Local Crime Rates

Insurance companies carefully monitor crimes rates in each neighborhood, so comprehensive coverage can be much higher in areas with more auto theft and vandalism. While you may not be able to do much about local crime, keeping your car garaged or installing anti-theft measures can bring your rates down.

3. The Type of Vehicle

More expensive vehicles obviously cost more to insure, while others, such as sports cars, are more likely to be involved in an accident. Large trucks and SUVs are also capable of causing more damage than smaller cars, which usually translates to higher premiums. Comparing prices before choosing your next vehicle can help you avoid sticker shock when it’s time to buy a policy.

4. Your Age

Young, inexperienced drivers are much more likely to cause an accident than any other age group, so insurance companies typically charge more. Most drivers will see their auto insurance rates drop as they age, with significant discounts at 18 and 25, but there are some steps you can take to lower the costs of covering a teen driver.

5. Your Credit Rating

Combing through their data, insurance companies have found a reliable link between a poor credit rating and the risk of filing an insurance claim. Paying your bills on time and avoiding excessive debt will not only make it easier to qualify for a loan, but it could also substantially reduce your insurance costs.

With over 30 years of combined experience and access to policies from over 50 leading carriers, Sun Valley Insurance offers tailored solutions and personal service to drivers throughout Indian Trail, NC. They take the time to fully evaluate your situation and shop around to find the right auto insurance policy for you at the best rates available. Learn more about their wide range of services online or call (704) 282-1155 to request your free quote.