It’s happened to most of us, we call to insure our new or used car and find out that our policy is quite a bit higher or lower than our previous car. This can either be a welcome surprise or a big shock to our budget.
Auto insurance policies are not one-size-fits all. The insurance carrier consider many factors when determining the cost of your policy, several of which are unique to you and your vehicle.
1. What Car You Drive
There are several factors related to the car you drive that can impact the amount of your policy. Here are a few of them:
Value & Repair Costs: If you drive a car with a higher purchase price or one that is more expensive to repair than others, your policy cost will be higher.
Age of the Car: You may have noticed that getting a new car can increase your auto insurance policy rate. Older cars tend to cost less to insure than newer cars because their replacement cost is much less in the event of a collision.
Theft Likelihood: Believe it or not, if your model car is more likely to be stolen than other models, it may come with a higher insurance premium. However, having anti-theft car features can help lower the premium.
2. Your Driving Habits
There are several factors related to your personal driving habits that can impact the amount of your policy. Here are a few of them:
Annual Mileage: The cost of your policy is also determined by the number of miles you drive annually. This is based on the fact that the more you are on the road, the more likely it is that your car could be in an accident and visa versa. If you change jobs and your commute gets shorter or you find you are driving much less, let your insurance agent know, having a lower annual mileage could help lower your policy cost.
Accident History: If you have been in several accidents, your premium is going to be higher than someone who has been in few to none. How long ago these accidents occurred also matters. As the accidents get further back in your history, your premiums should go down.
3. Who Is Driving
There are several factors related to the demographics of the driver that can impact the amount of your policy. Here are a few of them:
Age: Younger drivers and much older drivers have higher accident rates and therefore higher insurance premiums. You will likely pay quite a bit more for “newer” drivers under the age of 25. However, once they are over the age of 25, their premium can drop significantly.
Gender: According to accident statistics, young males are more likely to get into accidents than young females. As a result, young male drivers can be more expensive to insure than young female drivers. There are however, a handful of states that do not allow insurance carriers to base rates on gender.
Marital Status: Married people have been found to have lower accident rates than single people. That wedding may have been expensive but you could save on your auto policy!
Ways to Get Discounts
You may not be able to control of some of the factors above that determine your policy but there are a few things you can do to lower your premium:
Take a Safe Driving Course: Completing a driver’s safety or defensive driving course can make you a better driver and lower your policy premium.
Show Off Your Student’s Good Grades: Insuring your teenage driver? If they have good academic standing, you could get a discount on your policy.
Bundle Your Insurance Policies: Bundling your auto insurance policy with your other insurance policies can amount to savings on all of your premiums.
If you have questions about your current policy or the cost of a new policy, reach out to one of our insurance agents and we can walk you through it and help find ways for you to save.
Ryan grew up in Keokuk, graduated from Keokuk Senior High, and started his agency in Keokuk from scratch in 2003 after having worked for one of the largest international accounting firms, KPMG, LLP.
Ryan is hardworking; his loyal and trustworthy character is exemplified by the way he does business. He thoroughly enjoys helping clients through the insurance buying process to secure coverage for their most valuable assets.