Are you worried that you’re spending too much on car insurance? Many people don’t really know what a “good” rate is, or why certain insurance companies have higher premiums than others. In addition to the basics like your accident history and your age, there are actually lots of other factors that insurance companies look at when deciding what your insurance rates will be. Here are some of the most surprising things that can raise your car insurance costs.
As mentioned before, age is one thing that many people acknowledge as a determining factor in car insurance rates. However, most people think that only applies to the higher rates that teenage drivers are usually charged. In fact, it’s not just being young that works against you in this case. Many insurance companies raise rates for drivers when they turn 50 since, statistically, people 50 and up are more likely to get in accidents.
Even if you’re a careful single driver, it’s possible that your marital status could work against you. Unfortunately for singles, studies have proven that married people are much less likely to get into a car accident or incur driving violations. Those statistics can drive up your car insurance rates.
Ever heard a joke about women being poor drivers? As it turns out, the cliché should be reversed. Men are actually much more likely to get into car accidents than women, so they are often charged higher premiums as a result.
The more often you drive, the more likely you are to get into an accident. If you’re putting more miles on your car due to more travel or moving farther from your job, there’s a chance your rates could go up.
Statistics show that smokers are more likely to get into auto accidents. There seems to be a tie between doing something with your hands other than driving and getting into car wrecks, so smokers are often charged higher insurance premiums.
If you’re not performing well in school, it could be reflected in your insurance rates. Bad grades don’t necessarily raise your existing rates, but good grades in high school or college are often tied to discounts on car insurance costs. In short, doing better in school could save you money on car insurance.
Poor Credit Ratings
The reason that having bad credit ratings causes higher car insurance rates is necessarily tied to whether you’re likely to cause accidents. Actually, insurers often charge higher premiums for people with poor credit because they are seen as a more unreliable customer. Since bad credit often stems from missing payments, writing bad checks or getting into debt, this leads insurers to believe that there’s a chance you might not pay them at some point in the future, and your higher rates provide a bit of protection and reassurance in case that should occur.
(Also read: Easy Tips For Building Up Your Credit Score.)
Tips for Lowering Car Insurance
Do you fall into one or more of the categories listed above? If so, then consider these alternatives to lowering your car insurance rates:
- Shop around for better rates. There’s often a better deal out there if you’re willing to put in some time doing research. For example, not all insurance companies look at credit when determining premiums, so if you have poor credit you should look for a company that won’t factor that into your rates.
- Use the list above to your advantage. Are you a woman? Married? Under 50? If you don’t fall some or all of the categories listed above, you may be able to use that to your advantage when shopping for better insurance rates. It’s always helpful to mention if you haven’t had any moving violations in a few years, as well.
- Don’t get more coverage than you need. People with older cars can often forgo collision or comprehensive coverage due to the low market value of the car. You may also be fine with the minimum personal injury protection if you already have good health insurance, life insurance and disability insurance.
- Ask for a higher deductible. You can increase your deductible to pay less in monthly premiums. An increase of just a few hundred dollars could result in a rate reduction of 15% or more.
Car insurance is one monthly cost that many people don’t think about after their policy is set up. It’s a good idea to review your policy each year to see if there are any changes you can make to lower your rates and to shop around for better offers from other insurers.
(Also read: Car Insurance Guide: Everything You Should Know.)