Did you know that the countrywide average auto insurance
expenditure rises by more than 5 percent each year?
In 2018, the average cost to own and operate a 2018 model vehicle was $8,849. Out of the total cost, a whopping $1,232 accounted just for the insurance. The only way to get a low insurance rate is by satisfying all the conditions that the car insurance agencies have set for a new applicant.
Here are the top 4
things that affect your car insurance rates.
1. Gender
According to a report by the Insurance Institute for Highway Safety, males(and not females) are more likely to get into a fatal accident. Gone are the days when people use to make fun of clumsy female driver. They are doing quite well with their driving.
The reason behind this fact could just be a numbers game as
males drive more miles each year than females. But the insurance companies do
not consider it as a number game. Car insurance rates for both males and
females are equal when they are in their 30s-50s. They begin to skyrocket for
men once they hit the 60s.
2. Age
Ask any car insurance agent and they will say “The younger
the driver, higher will be the insurance rate”. This makes total sense, as
young people are more likely to get in a fatal accident(as a result of alcohol
consumption or aggressiveness).
The older a person gets, the less likely it is that they will
engage in reckless driving. Hence, this gives car insurance companies leverage
to offer low-interest rates for older people(less than 60).
3. Location
Do you stay in a small town or you are a city guy/girl? This might
seem silly to some people but your location does affect your car insurance
rates. People staying in urban areas pay a higher car insurance rate than those
from a rural area. Also, things like the population, condition of the roads,
weather, culture, etc factor in while calculating your car insurance rates.
4. Credit score
The credit score is one factor that might or might not affect your insurance rates. Some states allow the credit score to considered while calculating the rates while others express complete disapproval of it.
As a rule of thumb, whether the credit a score is taken into
consideration or not, applicants with a low credit score are likely to get
approved with a high-interest rate. There is no clear explanation for this but
this is true from what I know.
Summary
The purpose of sharing the above 4 factors is to make you aware
of how your car insurance premiums are affecting your finances. I know many
people for whom, paying a sum of $8,849 annually is daunting.
If this sounds like you, you need to look at other factors(Previous insurance coverage, Years of
driving experience, your criminal record, Vehicle age and size, Miles drove
until now, etc) as well and make sure you tick all the boxes. To your
relief, these factors are fixed and known.
