As a car owner, you probably realize that it’s important to know that you’re properly insured, but you may still wonder what a decent rate for car insurance is. The following factors will all have a significant impact on the premium that you pay.
Realize That an Accident Can Happen Anywhere and at any Time
If you drive a car, there is a possibility that you could end up in an accident, and there aren’t any exceptions to this rule. There is a significant difference between your chances of being in an accident depending on where you live, the type of driving that you do, and other factors.
These are the types of things that an insurance company will consider when they’re determining how likely you are to get into a crash. However, it’s always important to consider the average rate in your region before you look at other factors. Just realize that accidents do happen regardless of how careful you are in driving and be prepared to pay more in this event.
Living in Certain Areas Will Increase Your Rate
If you live in an area where there tends to be a lot of traffic accidents, your rates are likely to be significantly higher than they would be otherwise. However, most car owners wouldn’t know whether or not their area has a high rate of car accidents without doing some research. Therefore, you’ll be able to get an idea of what you can expect to pay for car insurance in your region by looking at this information:
- It’s often possible to look up traffic statistics on your state or local government’s website.
- Always make sure that you take a look at several different sources if you find information on privately run websites.
- Don’t look for information about traffic statistics on websites that may be outdated or not reputable.
- It’s not always just the number of cars on the road to consider, but it’s also important to consider your typical commute to work. If you live in a low traffic area but have to travel through a high traffic area to get to work, your rates may be higher.
Your Age and Gender Can Have a Significant Impact
In general, you’ll pay more for car insurance if you’re younger, and your rate will usually go down as you get older. Rates tend to be particularly high for drivers who are under age 25, and they decline fairly sharply after that. Those drivers in their 40s, 50s, and 60s tend to have the lowest rates. After the age of 70, rates climb significantly.
Many insurance companies take your gender into account in setting your car insurance rates. Males tend to have higher rates beginning at age 16. Around the age of 30, women pay slightly more until about 60 when rates for men are often higher again.
Your Claims History Is Important
If you have a claims history, it will almost always impact the rate that you pay every month, but the specific amount that it will affect your rate varies significantly based on a wide range of factors related to the claims on your record. Here’s what you need to know in order to determine how much a claim is likely to impact your rates:
- If you have a claim history that includes a serious accident, your rates could be far higher than they would be otherwise.
- Always make sure that you consider the rate that you can expect for people with a claims history similar to yours.
- In order to determine how much a particular claim will impact your rates, you need to consider how much it cost the insurance company. A more expensive claim will impact your rates significantly more than one that’s less costly.
Your Deductible Will Influence Your Rate
While you may be tempted to get a lower rate by choosing a plan with a higher deductible, there is a downside to this, which is the fact that high-deductible plans will typically offer less protection. However, it’s important to know what to expect when it comes to deductibles before you can determine the impact that yours will have on your premium. These are a few of the most important things that you’ll need to know:
- Keep in mind that some plans with a high deductible also offer a high coverage limit. Therefore, these policies can be used in conjunction with another plan that covers smaller claims in some cases.
- Avoid policies that have a high deductible along with low coverage limits.
- Make sure that you compare the deductibles of different options that an insurance company offers you. Changing your deductible can lead to a significant difference in your premium.
The Coverage Limit Is Important As Well
While the coverage limit may or may not be a major factor in determining your premium, the impact will be substantial if you have to seek out policies that offer a high coverage limit. Depending on your state’s requirements and what you’re using your vehicle for, you may need to seek out a policy with a high coverage limit.
However, the coverage that you need as an individual will depend on your personal circumstances, the vehicle that you own, and other factors. Therefore, your unique needs will have a major impact on the rates you’re likely to pay.
The Climate of Your Region Could Impact Your Rate
If you live in an area with harsh winters, your rates may be higher, and that’s because the incidence of accidents increases during the winter season in many areas. Here are a few examples of regions in the United States where your rates are likely to be higher than average due to climatic conditions:
- The northeastern states
- The upper and central Midwest region of the country
- Higher elevation regions of the mid-Atlantic states
- The Rocky Mountain region and much of the intermountain west
- The Sierra Nevada Mountain region
- Alaska
- All other regions that receive substantial winter snowfall and/or ice accumulation
The Tax Rate in Your Region Can Influence the Amount You Pay
If you are a small business owner and use your car for work, the tax rate of your area will have an impact on the amount you’ll pay for car insurance. That’s because car insurance costs are tax deductible, which means that your premium will reduce the amount that you pay on your taxes.
The Type of Vehicle That You Own and Its Condition Are Important
As you would expect, one of the most important factors that will be taken into account, when your rate is being calculated, is the type of car or truck that you drive and its condition. These factors are some of the most important things that will determine how expensive getting insurance for your car will be:
- If you own a pricey car, your rates are likely to be significantly higher than they would be otherwise.
- Sports cars tend to be more expensive to insure than other vehicles.
- Your car is likely to be more expensive to ensure if it has any mechanical issues that increase the risk of an accident.
- If your vehicle is overdue for inspections or necessary repairs, your rate may be higher than it would be otherwise.
Your Rates Are Likely to Fluctuate
Always realize that the rate you pay for car insurance will not stay the same. In fact, it typically will change every year, and it can even change more than once a year in many cases. Here’s what you need to know about how car insurance companies adjust your rate over time:
- Changes in your claims history will impact your rate.
- If you move, this will lead to a change in your rate.
- As you get older, your insurance rate will be adjusted accordingly.
While there are many factors that influence what you’ll pay for car insurance, realizing that the region you live in, the type of car you have, your age, and your accident history are the most important factors to consider.
