Drivers carefully shop and compare insurance rates to ensure they are getting the most coverage available at the most affordable price. However, auto insurance premiums are never fixed, and may fluctuate over time. Whether they rise or fall, there are several reasons why car insurance rates are subject to change.
What will Cause Car Insurance Rates to Change?
One of the most common reasons car insurance rates change is due to a traffic accident or citation. Speeding, driving under the influence or being ticketed for a traffic accident are all reasons insurance rates may rise. However, some minor traffic citations may not go on your permanent record or raise your insurance premiums if you take a defensive driver’s education course in the weeks following the citation.
Another reason your car insurance rates may change is if you file a claim. Whether you are responsible for a multi-car collision, or if you become the victim of a car break-in, filing a claim against your policy will likely result in a higher insurance premium. On the other hand, if you do not file a claim for several years, you may see a reduction in your insurance premiums.
Age and Credit
Some factors that influence your auto insurance premiums are unrelated to your driving and claims record. If you purchased your insurance policy while you were young, you may see your premiums drop as you get older. For example, insurers often provide significant rate reductions when women turn 21 and men turn 25.
Similarly, your credit score has an influence on your ability to secure a low insurance premium. Insurers often perceive individuals with good credit as safe drivers. If you received a preferred rate due to a good credit history, but your credit score subsequently dropped, you may see an increase in your auto insurance premiums.
So you’ve finally bought that sweet sports car you’ve been saving up for, and now you need to buy auto insurance so you can actually drive it. However, there are a few things you should know before you buy auto insurance for your new vehicle so you’re not taken by surprise when you’re faced with high insurance rates. In most cases, insurance rates for sports cars are much higher than those for other types of vehicles for the following three reasons:
- Sports cars are generally more expensive than other cars, which means that they need to be insured for a higher replacement value than regular vehicles.
- In addition to high replacement costs, sports cars can be costly to repair, due to the difficulty of finding replacement parts and skilled technicians.
- Insurance companies consider the typical sports car driver to be less responsible on the road than drivers of conventional cars.
Besides the higher costs of the sports car itself, insurance companies will look at your personal information. In nearly every state, insurance carriers look at your credit score to determine how dependable you are financially. The higher your credit score, the lower your insurance rates. Additionally, your age and marital status are important factors in deciding how responsible you are, and of course, your driving record plays a very important role. And though you can’t really do much to change your age and marital status, you can go to traffic school to get a certificate that proves you’re a responsible driver. Think about it: a couple of hours taking a driving course can save you hundreds of dollars!
Have you ever wondered how insurance companies determine home and auto insurance rates? Naturally, the types of coverage you have and the amount for which you’re covered play a large part, but insurance companies look at more factors than the combined costs of, for example, bodily injury liability and collision insurance. What follows are five factors that affect your home and auto insurance rates.
- Marital status. Whether you’re single or married plays a large part in determining your insurance rates. In general, married customers are perceived to be more stable and less of a financial risk than single people, so they get lower rates.
- Number of dependents. If you have a family that depends on you, you’re more likely to behave responsibly, which results in lower rates. However, you probably also want more coverage to make sure your dependents are taken care of in the event of a major accident, so that can result in higher premiums.
- Property value. No matter whether it’s your car or your home, its replacement value is an important factor in determining your insurance rates.
- Location. Where you live is important for a number of reasons: crime rates, natural disasters, and distance to fire and police stations. Obviously, the safer your location, the lower your insurance rates.
- Your credit score. In all but three states, insurance companies consider your credit score as an indicator of your financial responsibility. A high credit score results in much lower insurance rates.
Let’s face it: Comparing insurance quotes isn’t something many of us do every day. So when it’s time to buy car insurance for your new car or because you need to make changes to your coverage and want to see if there’s a better deal out there than your current auto insurance company offers, it’s good to know what’s true and what’s not about comparing insurance quotes. Read on to find out the truth behind the following statements:
All major insurance companies offer more or less the same rates and coverage, so comparing insurance is a waste of time. This is a myth. Though the major insurance companies offer the same types of coverage and terms and conditions, special offers and discounts vary, so it’s always a good idea to shop around before you buy car insurance.
You get the best deals through the insurance company itself. This is a myth. A lot of insurance companies offer low rates online, but often, they offer even lower rates through online comparison sites like AgentInsure.
If I buy insurance online, I can’t ask any questions about my policy.This is a myth, as all insurance quotes contain the phone number of an insurance agent who is trained to answer your questions.
An insurance quote is not binding. This is true. Quotes are an estimate of the rates you’d pay for a policy that meets your requirements and aren’t legally binding.
My credit score affects my car insurance rates. This is true; in all but three states, insurers consider your credit score when determining rates.
What factors determine car insurance?
Students who are just starting out driving or are younger than 25 will pay higher premiums. Sometimes, they can save little by adding to the parents’ car. Some cars are known to be in more accidents and will cost more to be covered. How you are going to use your vehicle will impact the premium. Records can cause your premium rise. Watch your credit score and your driving history. A good Texas insurance agent will be able to answer your questions.
What are some of the minimum requirements of insurance for auto insurance? Before a person gets into the car, they must have liability insurance that covers $25,000 for each individual, or $50,000 per accident. There is a minimum of $25,000 damage to other vehicle. A person does not have to buy insurance to cover their own car unless it is owned by a loan company.
Should I drop coverage on my own vehicle when I owe nothing and just cover the other person’s car? When you owe, the law says comprehensive and collision must be purchased. It is not always a good idea to drop it. You may want to consider covering your windshield from flying rocks, medical coverage if you do not have good health insurance, or other coverages that maybe needed.
Can you save on premiums when you have more than one car on one policy? Yes, the insurance want more of your business. It means more money for them. Be sure to compare insurance quotes by researching the Texas insurance market.
Is the cheapest always the best? No! You may only paying a premium, and getting nothing much for your money. Shop, and compare Texas insurance companies.
There’s a lot of thought put into how much you’re charged for your car insurance premiums. Although much of it is intuitive and includes factors like your age and driving record, there are some factors that you’re probably not aware of. Here are a few lesser-known car insurance factors that could be causing you to pay a lot more (or a lot less) than the next guy.
- What you do for a living. Believe it or not, this plays a big part in how much money you’ll spend a year on car insurance. But it has nothing to do with your earning potential or how much an insurance company thinks you can afford to pay. It actually relates to the personalities that gravitate toward particular fields. For example, scientists are seen as lower risks behind the wheel than lawyers. Why? The job of a lawyer is viewed as a more high stress occupation, and one that has the capacity to spill over into a person’s personal driving time through frequent business related cell phone calls. Scientists, on the other hand, are considered practical and logical in their approaches and are therefore seen as lower risks.
- Where you live. You may interpret that insurance companies target people who live in certain communities as being financially capable of paying higher insurance premiums, but this isn’t the case. What an insurer does take into account, however, is information about crime statistics and traffic in your area—each of which could have a significant impact on the increased risk of insurance claims.
- Your credit score. Sure, it makes sense that your ability to buy a car should be affected by your credit score—but your ability to get a good rate for your insurance? Insurance companies look at people who have good credit ratings as individuals who have displayed a consistency in their financial responsibilities They view this behavior as a sign that someone’s more likely to behave responsibly behind the wheel of a car.