Factors That Affect Your Auto Insurance Premium

For residents of the 48 of the 50 states that require liability coverage, car insurance is a fact of life, and becoming a more expensive one, at that.  According to an article from Consumer Reports, “Consider how much insurers are paying out in claims. While the long-term trend shows that the number of accidents is declining, the average payout on the accidents that do occur is rising. From 2005 to 2013 (the latest data available), the number of claims for bodily injury fell 14.5 percent, according to the Insurance Research Council, yet the average cost per payout rose 32 percent, to more than $15,500. During that period the general inflation rate rose 19 percent.”

Another factor driving up rates is the cost to repair our vehicles.  With the advent of more computerized components and electronic parts, the cost insurance companies pay when vehicles need repaired is rising, with those costs being passed along to the policyholder.

Insurers go by statistics to determine who pays more and who doesn’t.  Certain demographics have fewer wrecks and file fewer claims, so they enjoy the benefit of lower rates.  Considerations actuaries take when figuring the price for automobile coverage include:

1. Age-the older you are, the lower your rates.
2. Marital Status-Married drivers have fewer claims than singles.
3. Zip Code-For drivers who live in an area with more accidents, they will pay higher premiums, regardless of whether they have a clean driving record.
4. Driving History-accidents, tickets, suspensions, and points all equal greater expenses for coverage.
5. Credit History-statistically, drivers with better credit make fewer claims on their car coverage.
6. Insurer Loyalty-many car insurance companies offer incentives to drivers who stay with them long-term, such as lower premiums or accident forgiveness.
7. Type of Vehicle-The bigger and more powerful the vehicle, the greater its likelihood to be involved in an accident.  Also, certain vehicles have more of a chance of getting stolen.

Finding the right car insurance carrier and keeping premium costs down can be tricky.  Scott and his team of independent insurance agents have their fingers on the pulse of the insurance industry.  Their know-how of changing trends will work to make sure you get the right coverage at the right price. Contact them today for peace of mind that doesn’t change with the times.