Buying used cars - 1/24/20
 
 

NASHVILLE, TN (WSMV) - It’s always a challenge to find good car insurance rates. But the price of your rates can move up and down for all sorts of reasons. 

Here are some of the top things that can influence your car insurance rates that you may not know about:

Your driving record.

In terms of both number and severity of accidents and violations your driving record is a big factor. Consumers who make claims above an insurer-determined amount due to accidents that are primarily their fault, or who are guilty of moving violations, should expect their premiums to increase.

A series of these problems will eventually lead to policy termination. Although drivers may consider not reporting significant crashes to their insurer, this decision can lead to the insurer being unprepared to defend the driver in court in case of a lawsuit. 

Length of driving experience.

Your driving experience can also affect rates, but only when paired with driving record.

The number of and dollar amount of past claims.

The number of and dollar amount of past claims can impact the rates you receive.

Car usage

Car usage can impact your insurance rates in terms both of frequency of driving and mileage. 

Type of car.

Some types are more expensive for insurers than others, due to differences in replacement part cost, theft rate, repair costs, performance on crash tests, and overall safety record. Older cars are more expensive to fix than newer. Larger vehicles are safer than smaller, but the ratio of engine size (V8 versus V4) is coupled with car size. Sports cars by their very nature are considered particularly risky. Added car safety features may decrease rates, but only if they are relatively inexpensive to repair.

Types of insurance coverage chosen

The types of insurance coverage chose, including deductible level is a factor in fates being higher or lower.

Gaps in coverage over time.

A gap in your cover time is considered relevant to risk.

Vehicle ownership status

Vehicle ownership status, as some leases require extensive coverage not mandatory for owners, and drivers paying off loans are deemed more risky than those with paid-off cars.

Residence zip code,

Your zip code which has been statistically shown to be associated with vandalism, theft, and accident rates, proportion of uninsured drivers, total number of insurance claims including fraudulent ones, and even weather severity can drastically impact your rates.  As a consequence, urban areas are more expensive than rural.

Gender.

Females are more cautious and so are safer drivers than males.

Age.

Drivers younger than 25 and older than 70 are riskier than those intermediate, the younger because of risky behavior and the older because of worsening reflexes and eyesight. The impact of age is less for women than for men.

Marital status

Married drivers have been statistically shown to be safer than unmarried, with the impact again less for women.

Education level

Education level could impact costs, with college educated known to be statistically safer than high school or less.

The most controversial, insurance scores. 

These are analogous to credit scores, differing as they are based on predicted insurer cost rather than predicted credit delinquency. The factors involved are the same; amount of debt, any bankruptcies or collection agency contacts, length of credit history, number of credit accounts, and timeliness of debt repayment. In essence, consumers better at money management get lower rates than those worse.

Even just asking an insurance agent about the effect of possible claims on resulting rates may increase rates.

 It is illegal to use either race or religion to determine insurance rates. Nonetheless, a 2017 study by Consumers Reports and ProPublica concluded that consumers living in predominantly minority neighborhoods were being charged more than predominantly majority neighborhoods with similar safety records.

Obviously, consumers wishing to lower rates cannot readily change many of the factors listed above. But they can affect others. Suggestions include:

Driving carefully and less often by, for example, combining errands on a single trip.

Driving a cheaper-to-insure car and maintaining it well.

Keeping a clean driving record and a high insurance deductible level and not allowing coverage to lapse. It is possible for those without a car to get a very cheap insurance policy for this purpose.

Parking in a secure garage to lower chances of vandalism and theft

Reporting significant changes in driving tendencies that lower usage

Owning rather than leasing, and paying off car loans as quickly as feasible.

  • In general, managing money carefully.

Those younger than 25 are often helped by taking a driver’s education course and maintaining a B or better average in school. Similarly, those older than 55 can benefit from available courses, such as those offered by the American Automobile Association. In addition, CarFit is a program set up by the AAA, AAPR, and American Occupational Therapy Association that can examine the interior of a senior’s car and make suggestions on fixes that maximize safety.

 

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