Tag Archive for: factors that affect your car insurance rates

What Caused My Car Insurance Rates to Change?

Year after year, auto insurance policy premiums seem to always be going up. You may not be doing anything different, but you are still affected. There are certain situations in which changes in your personal life may cause your rates to fluctuate. Understanding how these changes affect your insurance will explain a lot when you take a moment to go over your policy. Stay in contact with your insurance agent and ask questions whenever they arise. It’s better to stay informed than to constantly worry.

What Causes Rate Fluctuations?

Several factors can cause your auto insurance premiums to fluctuate. Some of the most important factors considered in determining premiums include:

  • Marriage/divorce
  • The birth of a child
  • Death of a spouse
  • Adding a student driver
  • Major illness or health issues
  • Your credit
  • Increase in your income

Experiencing any of these lifestyle changes can cause an increase or decrease in your premiums. Talking to your agent will help you understand why the fluctuation occurs. They can also help you take advantage of any discounts you may be eligible for, such as safe driving discounts.

Why Does It Continue to Increase?

Other outside influences will cause your insurance rates to increase. This will happen no matter what you do. A few of these factors include:

  • Where you live
  • The environment where you drive and park your vehicle
  • Your vehicle itself

Upgrading your vehicle is one of the most common causes of an insurance spike. If you have taken a loan, you will be required to purchase comprehensive insurance coverage to protect the bank’s investment. These fluctuations deal more with the world around you instead of your personal situation.

Talk to Your Agent

Your agent is the first person you should talk to when you have questions concerning your car insurance premiums and how they are determined. Ask them to perform an audit on your policy and go over each part of the policy, point by point. If you see something you don’t understand, make sure they explain it to you. There are times when your agent may be able to save you some money. Student driver discounts and bundling all of your policies into one are just two ways you can save money on your monthly premiums.

Understanding your auto insurance policy and why your premiums change will help you budget properly. If you have questions about why your premiums change and what you can do to keep them within a manageable range, contact the experts at James Page Insurance today. We are ready to assist with all your insurance needs.

Three Statistical Factors that Affect Your Car Insurance Rates

Insurance companies use many factors to determine the premium rate specific to each client. Persons with expensive possessions, cars, or businesses may be charged higher than others. Insurance providers also consider statistics to set prices; that is, they study facts and figures and use them to determine their rates.

Here are some of the car insurance industry statistics that are likely to affect your rate.

1. Credit Score

Although it may seem unfair that persons with a low credit score are charged higher coverage rates than others, statistics have shown that this group of people are more likely to file claims than those with good credit. People with high credit scores may choose to pay for easy repairs or minor damages, while the low credit group is unlikely to have extra income for such. The provider considers the pros and cons for both groups of people to make correct predictions and estimations.

2. Age

The insurer will consider the age of the person before deciding on the rate for the automobile. Reports have shown that teenagers are at a significantly higher risk of getting involved in car accidents compared to adults; hence, your provider may consider if you have teenage drivers at home. Intoxication, texting and driving, speeding, and tailgating are some of the dangerous behaviors that are common among teenagers, increasing the likelihood of car crashes.

Let’s take a look at the statistics on teenage drivers:

Per mileage, persons aged 16 to 19 are three times more likely than those aged 20 and above to have fatal car accidents.

The percentage of male teenagers involved in auto accidents is significantly higher than females.

Also, because there is no driving history to consider when starting an auto coverage plan for a teenager, the provider makes estimations based on statistical data.

For elderly drivers, age is not the direct cause for an increase in risk but age-related health conditions such as stiff joints and vision problems are red flags for insurance companies. Generally, it is advisable to stop driving at age 80 because there is a likelihood of sudden loss of motor skills.

3. Location

Some states or cities are safer to drive in than others. Insurance companies also consider geographical locations when deciding on rates. Accidents are higher in cities or urban areas than in rural areas due to the number of drivers and the commotion caused by heavy traffic. Congestion is one of the leading causes of car crashes, and small towners do not suffer regular traffic patterns compared to city people. The traffic fatality rate in America is 12.4 deaths per 100,000 inhabitants. Deducing from the statistical reports, persons living in the populous zones will tend to pay more in insurance than those living in lesser populated areas.

Note that your provider relies on the general statistics regarding your age, sex, credit score, driving frequency, and geographical location before setting the cost of auto insurance. However, you can make use of the available discounts for good driving behavior to keep your premium low.

Willing to learn more? Contact our car insurance experts at James Page Insurance today! We will be happy to assist you.