Several factors contribute to differences in the rates applied to various drivers for auto insurance policies. While some of these determinants are controllable, others are not. However, in as much as some of the uncontrollable factors may serve to disadvantage you, auto insurance policies are worth taking as they help you to escape both financial and legal repercussions in the case of an accident. Nonetheless, you may lower the amount expended for your auto insurance by managing the controllable factors to your advantage. Therefore, have a glimpse at the article below and get an idea of the reasons why you are likely to incur different costs for your auto insurance policy as opposed to your colleague driver and plan on how to reduce your insurance expense.
- Driving history
Your past driving record can help to give the insurance company a brief idea of how safe you are on the roads. For instance, if you have had a history of many previous accidents, the assumption is that the same trend will continue. Therefore, in such a case, the insured is supposed to incur a higher auto insurance rate than those with a driving history of no accidents. So, for you to pay lower auto insurance premiums, the solution would be to keep watch of all traffic rules and regulations to avoid a lot of accidents.
- Age, marital status, and gender
These demographic factors influence the rate of accidents among different people based on a standard scale as summarized from various statistics. The younger a driver is, the lesser experience the driver has, hence, the higher the chances of causing accidents which impact to higher auto insurance rates than those of an older driver. Also, a married person is more likely to be more careful on the roads as opposed to singles, meaning that married people pay lesser auto insurance rates than their single counterparts. Besides, ladies are less likely to get involved in accidents while men tend to be associated with more accidents according to statistics. Therefore, women pay lesser rates as compared to men.
- Your location
The place where you reside affects the auto insurance rates you pay mostly due to two factors. First, the traffic in your area and second, the crime rate in the region. A person residing in an area with high traffic is more prone to getting involved in an accident unlike one who lives in a place with minor road traffic. So, the one who lives in an area of high traffic pays higher auto insurance premiums on higher rates than the former. Besides, the more the crime rate in your area, the higher the auto insurance rates you are required to pay due to the high risks of getting your car stolen as opposed to a person who resides in a place with low theft cases.
- Type of the vehicle
The model of your car significantly brings a huge difference in the auto insurance rates the insured is supposed to incur. The two most important determining factors here are; the value of your car as well as its safety. Expensive cars are more likely to lead to higher insurance claims as opposed to cheaper cars. Therefore, if you own an expensive car, the higher the auto insurance rates expected from you unlike one who owns a standard car. Besides, unsafe automobiles are more costly to insure since they may lead to serious injuries or even death in the case of an accident. So, if you own a sports car, the higher the auto insurance rates due to the high risk of getting involved in an accident.
- Annual mileage
The number of hours you spend on the road is a major factor to consider while determining the amount of auto insurance rate the insurance company expects from you. The more hours you spend driving, the higher the chances of you getting involved in an accident thereby leading to higher insurance rates than one who spends lesser time on the road. So, if it isn’t a must for you to be on the road, try to lower the number of hours you spend driving to reduce the rates applied for your policy.
As you can see, several determinants impact the rates applied to your auto insurance cost. Therefore take advantage of those factors that you can control to lower the amount of car insurance you are supposed to pay.