You pay one amount for car insurance, your spouse pays another, and your neighbor pays still another. What gives? Most insurance companies look at seven key factors. Taking a closer look at these factors can keep insurance costs down.
Policy and Deductibles
You choose your insurance deductible and then decide whether to add additional coverage not necessarily required by state law; these specifics play a major role in your monthly payment. Generally, choosing a higher deductible means a lower monthly payment; a lower deductible equals a higher monthly payment. Additional coverage gives you added insurance protection, depending on the claim, but also increases costs.
What You Drive
Providers often develop vehicle safety ratings by collecting data from customer claims and analyzing industry safety reports. They offer discounts to customers with safer vehicles.
The opposite can apply to dangerous, flashy rides. Premiums may increase for cars more susceptible to damage, occupant injury, or theft, and rates lowered for those that fare better than the norm.
Vehicles that rate high in driver and passenger protection, like newer Toyota 4Runners, get insurance discounts. Two-door Honda Civics are one of the most popular vehicles, but their lower-than-average safety ratings and desirability to car thieves make them more expensive to insure.
Before you head down to the dealership, do some research. Does the vehicle that’s caught your eye have strong safety ratings? Is that model often stolen? These factors can go a long way toward keeping rates low.
How Often and How Far You Drive
People who use their car for business and long-distance commuting normally pay more than those who drive less. The farther you drive per year, the higher the chances of a crash – regardless of your safety record.
Consider joining a car or van pool, riding your bike, or taking public transportation to work. Reducing your total annual mileage may lower your premiums.
Where You Live
Generally, due to higher rates of vandalism, theft, and crashes, urban drivers pay more for insurance than those in small towns or rural areas.
Your Driving Record
Drivers who cause crashes generally pay more than those who have gone crash-free for several years.
If you’ve been crash-free, don’t get complacent. Remain vigilant and maintain good driving habits. Even though you can’t rewrite your driving history, a crash on your record can be an important reminder to always drive with caution and care. The effect of past crashes on your premiums will eventually decrease.
Your Credit History
Certain credit information can be predictive of future insurance claims. Where applicable, many insurance companies use credit history to help determine insurance costs. Maintaining good credit can have a positive impact.
Your Age, Gender, and Marital Status
Crash rates are higher for all drivers under age 25, especially single males. Most car insurers provide discounts to student-drivers who maintain good grades.
Information provide by State Farm® . Call Kristi Kim to make sure you have the coverage you need and discounts you deserve.