Over the past 5 years auto insurance prices have been slowly rising and rising. Many different factors lead to your premiums continuing to rise. What factors determine the price of your auto premiums?
Factors for Auto Insurance
Your Driving Record and Claim History: This is probably the most obvious and also most important factor. If you have multiple claims, whether you were at fault or not, your insurance premiums are going to be higher. This just gives them more reason to believe that you will get into more accidents.
How Much You Drive: The more that you drive your car, the more opportunity that you have to get into a car accident. If your commute to work is 1 hour every day, you may be paying more than someone who works from home and just uses the car to go to the grocery store
Age: With age, also comes experience. Younger drivers are prone to get into more accidents. For this reason, if you are under the age of 25, your insurance premiums are going to be higher than your parents.
Gender: Statistics show that men are more likely to exhibit risky driving behavior than women. This means that they are probably more likely to get into an accident, which would obviously mean that their premiums would be higher then a woman's.
Marital Status: Married couples are believed to be less likely to get into an accident compared to a single adult. This means that single adults will most likely pay more for insurance premiums.
Where You Live: If you live in an Urban Area like San Francisco or New York, where you have to park on the side of the street. Or you are driving on roads with hundreds of other drivers on the road at any given point, you're more prone to get in an accident. Let alone the chance of theft. This leads to higher premiums than someone living in a more rural area.
Your Car: When you own a car with a higher safety rating, your premiums will be lower. When you drive a car like a Toyota Camry, it has more safety options that will result in a smaller chance of injury in the event of an accident. This means there is a lesser chance that your insurance will need to pay for medical bills.
Credit: When you are applying for insurance the companies will almost always look at your credit score. They need to be sure that you are able to pay off your premiums in full and on time. If you have good credit, you can lower your premium prices, whereas a bad credit score is gonna cause your premiums to rise.
Cost of Labor and Goods: One major factor that has seen a massive bump over the last 5 years is the cost of goods and labor. There are a few pieces to this pie. Newer Cars have more expensive pieces around the car and the more expensive your car, the more expensive it is to replace it. As well, cost of labor has slowly been rising and if it costs more for the insurance company to fix your car then it did 5 years ago, your premiums are going to be higher.
We are beginning to see the light at the end of the tunnel with rising auto insurance premiums. However, it is always good to be cost efficient and take the tips that are given to you so that your premiums will drop. It is hard, if not impossible, to adopt all of these tips overnight. Take some time, try to clean your record, and work on getting your premiums down. It's not impossible but it does take some work.
For any more questions regarding Auto Insurance, give AZ Insurance Team a call at (480) 535 5709.
Independent insurance brokerage located in Tempe, AZ. We offer auto insurance, homeowners insurance, life insurance, renters insurance, commercial insurance…
Disclaimer: Coverage will vary on state, insurance company, and type of policy.
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