What Affects Car Insurance Rates?

What Affects Car Insurance Rates?

Question: Which of the following affects your car insurance premium?

  1. A) Age
  2. B) Driving history
  3. C) Credit score

Answer: All of the above!

Most drivers would agree that their auto insurance is too expensive. Luckily, you could save some extra cash by learning which factors determine your auto insurance rates. 

Factors That Affect Car Insurance Rates 

Car insurance companies evaluate a lot of information to assess your insurability. We’ve compiled the following list to help you understand why you may be paying more for car insurance

Previous Accidents  

If you’ve had any car accidents in recent years, insurance companies are definitely holding it against you. Most insurers will track your driving record back 3 to 5 years and charge higher rates if you’ve been held liable for any collisions. The good news is that you can eventually get a lower rate by avoiding accidents for a few years. 

How Much Does Insurance Go Up After an Accident?

If you file a claim after an accident and you’re found at fault, your insurance can increase by as much as 50%. Your rate can go up even if you weren’t at fault, but it will usually only increase by about 4% on average. 

Traffic Violations

In addition to at-fault accidents, receiving traffic tickets can also affect your car insurance. Getting speeding tickets can get you labeled a “risky” driver and disqualify you from favorable rates. 

More severe violations like DUIs/DWIs can carry even heavier penalties, but they certainly impact your insurance rate. Drivers with a history of drunk or reckless driving can generally expect to pay more and sometimes they’ll be required to pay the entire policy in full. 

Lastly, speeding violations are also a consideration in your insurance rate. Depending on your state, speeding may be defined as driving more than 10 to 20 miles per hour over the speed limit. A long history of speeding or reckless driving can result in strict coverage limits set by the insurance company. 

These barriers are the easiest to fix, as you can choose to be a safer driver at any time. Consider cleaning up your driving record to receive more competitive rates. 

Age

Age is among the top factors that affect car insurance rates. The cost gap between insurance rates paid by 50-year-old drivers and teenage drivers averages over $5,000 per year. Data suggests that younger drivers tend to be more accident-prone and more likely to file a claim.

Drivers can expect their auto insurance rates to drop significantly at age 25. Rates are lowest for adults in their 50s and rise again around age 70. 

Credit Score

This one may surprise you, but car insurance companies absolutely consider your credit history a factor that affects your insurance rates. Car insurance companies believe that drivers with lower credit scores are more likely to file a claim. 

Unfortunately, a low credit score may mean you pay more for car insurance. Those with high credit scores pay about $1,500 less in insurance premiums each year. 

Insurance History

If you’ve never been insured in the past, your rate will automatically be higher than another driver with more experience. 

Conclusion

There are plenty of hidden factors that determine your car insurance rates. Contact Gator Insurance Service at (727) 544-0064 for an affordable quote on auto insurance today.