Let’s be honest: car insurance is complicated.
Whether you’re shopping around for a new policy or are trying to figure out what’s going on with your own ever-fluctuating rates, understanding why your coverage costs as much as it does can certainly be confusing. While providers try to provide such details in black and white, sometimes understanding the fine details of your policy can be a headache.
Don’t fret. Below we’ve outlined five elements that impact the cost of any given car insurance policy regardless of your current coverage situation.
Consider Your Profession
First and foremost, consider that those in professions which require them to be on the road (think: delivery drivers) are treated differently from an insurance perspective. For example, rideshare drivers need specific insurance as many policies don’t provide full coverage for someone who’s on the road constantly. Those who only travel from work to home and nearly nowhere else, on the flip side, can typically score more competitive rates.
The Quality of Your Vehicle
A brand-new vehicle with a high quality rating obviously is going to be considered less of s safety risk versus a clunker with hundreds of thousands of miles on it. Beyond understanding your car’s safety rating, having a larger car or truck can likewise save you money as such vehicles are typically considered to be safer due to their size.
If you indeed have an older car, keep in mind that it might make more sense to replace it outright in case of an accident rather than worry about repairs which could cost more than the vehicle itself.
Location, Location, Location
Where you live (think: city and state) likewise has an impact on how much your insurance might cost. If you live in a quiet city where accidents aren’t the norm and drivers are generally safe, your premiums are likely to stay low. However, if you’re in an urban area with tons of traffic or highways a plenty, expect to pay a pretty penny.
Prior Tickets, Accidents and Collisions
Generally speaking, insurance companies reward those who are considered to be safe drivers. In other words, you’ve never gotten into a prior accident or collision and typically stay out of trouble on the road. While this doesn’t necessarily guarantee a massively discounted rate, remaining accident-free is a major plus in terms of coverage and how providers look at you.
Minding Your Credit Score
Although your credit score might not seem to have anything to do with your activity on the road, providers want to know that you’ll pay your policy in good faith on regular basis. The better your credit score, the better chance you have to score a reasonable policy. As such, any opportunities you can find to lower your credit score are a plus.
Even if your credit score is less-than-stellar, be wary of budget providers who excessively advertise that your credit doesn’t matter. Such policies might be dirt cheap or otherwise attractive, but could also skimp on essential coverage.
Drivers have every right to know why their insurance coverage costs as much as it does. With these points in mind, you can better decide what you can do to keep your costs down and whether or not it’s time to seek out a new provider.