I believe you have asked yourself many times – why is my car insurance so high. The answer is not too complicated, but you should know that many things affect the price of your premium.
Like most other costs, you can expect that your car insurance rates increase over time because of more expensive car repair and higher medical bills. While these elements are beyond your control, there are things you can influence. Let’s consider your options.
Why is car insurance so expensive?
1. Place of living
Believe it or not, the place where you live will impact your insurance premiums significantly. The reason is that various regions have different rates of vehicle theft, traffic congestion, history of accidents in a particular area, vandalism, and even weather patterns. So, they require various insurance expenses.
That means your rates will be higher if you live in a big city than in a quiet small town because of more traffic accidents. Also, if you live in the suburbs, but work in a big city, your rates will be higher than if your workplace is nearby your home.
Whatever insurance company you choose, it will use your ZIP Code to determine the level of risk in the area you live in.
2. Driving patterns
It is simple. If you are more often on the road drive and drive longer distances, you are more at risk. Keep in mind that the insurance premium will be higher when the distance between your home and your workplace is more significant.
If you don’t need to drive a lot during the month, you can avoid paying too much money for insurance by finding a company that sets the rates based on miles driven.
In any case, the company will calculate the more wear and tear of your car and the higher possibility of accidents. Also, car insurance for personal-use-only will be less expensive than the one for the vehicle using for business purposes.
Be careful when giving information to the insurance company. If you have just a personal policy, but use your car for some side business, you may become stuck with all the costs in the case of an accident. In such a case, the company has a right to refuse to fill your claim.
3. The year of birth
Insurance premium for those under the age of 25 is always quite high, especially if you are a guy. The reason is the percentage of accidents involving younger drivers. In such a case, premiums include that higher risk. Therefore, if you have a teenager on your policy, you should expect higher premiums.
Also, you will pay more after your 69th birthday because senior drivers are prone to accidents more on average. You probably won’t change the state because of car insurance, but keep in mind that California, Massachusetts, and Hawaii don’t permit the usage of driver age to set premiums.
4. Driving experience
The truth is that you will become a better driver over time, and the insurance companies will consider you a less risky driver. The longer driving history without accidents will lower premiums drastically.
Keep in mind that your driving experience includes even the time you stop driving for a while if you keep your license active.
5. Marital status
If you are single, widowed, or divorced, you can expect higher auto insurance claims than married drivers. Therefore, let your insurer know when you get married to reduce your insurance rates.
Residents of Massachusetts are the only exception to that rule because this state doesn’t permit that marital status influences the setting auto insurance premiums.
The fact is that accidents involving male drivers are almost always more severe than those involving women driving the car.
Therefore, insurance premiums are higher for men, especially young ones. From the thirties to fifties, insurance premiums are almost equal for both men and women.
Using gender when setting premiums is forbidden in Massachusetts, Hawaii, Pennsylvania, Michigan, North Carolina, and Montana.
7. Driving record
Your driving history will have a significant impact on the calculating of your insurance rates. If you have a few accidents, DUI convictions, or even speeding tickets, you can expect higher insurance prices.
You may have trouble finding an insurer if your driving record is full of car accidents. Luckily, you can improve your driving record over time since the insurance company will check for your traffic history for approximately three past years.
8. Previous insurance history
You can switch from one insurance company to another without any consequences, but driving without any coverage for even a day will impact your auto insurance rates.
If you decide to go without a car for some time, you should consider having non-owner car insurance. That way, you will avoid a lapse in coverage and an increase in the price of insurance in the future.
9. The type of car
If you drive a vehicle model having more accidents or it is more likely to be stolen, your premium will be higher. The calculation is precise. If you have an expensive car, the insurance company will pay more in the case of some damage. Therefore, your rates will be higher.
Keep in mind that the insurance companies consider sportier cars risky, which will increase your bill.
How to Lower Car Insurance Premium
Before deciding which company to choose, you should try to make some practical car insurance comparison by yourself to save money. Plus, I will list a few steps here to help you cut your car insurance rates:
- Compare the costs of insurance before purchasing a car and pick out the one with a lower premium.
- Check the offers of more insurers before deciding which one is the right option for you.
- Look for car insurance discounts available. Even though individual discounts are not too high, the combination of several different ones can be considerable.
- If you can pay insurance premium annually, you can save a lot of money.
- Give your best to keep your driving record correct.
There are points crucial for the insurance companies that you can’t influence, including your age, gender, and even the area where you live. However, you can do a lot to make your premiums lower by choosing the safer type of car, as well as taking care of your driving record and previous insurance history.