The NTSB (National Transportation Safety Board) estimates your lifetime chances of being in an automobile accident at one in four – 25 percent. Car insurance isn’t something you want to “cheap out” but with other items skyrocketing in price, your auto insurance should be a prime candidate for re-evaluation.
Auto insurance isn’t an option. It’s the law, so what are the factors that affect your premium amount and how can you and I get the coverage we need at a better price?
Factors affecting your car insurance premium
1. Your coverage amounts
Depending on your driving habits, you will need different coverage amounts. Someone who logs a lot of miles on a new car will require different coverage than someone who drives an old beater to town every 14 days.
2. Your deductible
The higher your deductible (industry talk for the amount you have to pay before they kick in anything) the lower your premium. Get a higher deductible and save for it in your emergency fund.
3. Your age
Old people rule! Sorry. Those with a few gray hairs around the edges generally take fewer risks, drive a bit slower, and have better developed reflexes to deal with changing road conditions.
4. Your gender
Old women rule even more. Same reasons, just more intense.
5. Your marital status
Make that married old women rule! The actuaries who calculate all these things have discovered that married people are better drivers.
6. Your driving record
Safety pays when it comes to your car insurance premium. This is a no-brainer … or should be.
7. Other members of your household who might drive your vehicle
If your son has had 5 wrecks before the age of 17, he will cause your car insurance premium to jump. You’ll have to specifically exclude him on your auto insurance and not allow him to drive your vehicle until his exclusion is waived.
8. Where you live, drive, and work
Some places are better than others … like it or not, your new Honda is more likely to be stolen or damaged in certain zip codes than others.
9. The type of vehicle you drive
A Mercedes, BMW, or Porsche will always command a higher premium since they’re more expensive to repair. Also, look out for vehicles that are tops on auto thieves’ lists.
10. Your credit history
There’s a legitimate fear that you people with a low credit score may crash a vehicle to get the insurance money.
Get great coverage at a great price
Always, always, always ask for discounts. Car insurance agents may not point them out and even those that will may not know that you’re eligible for a specific discount unless you mention things like:
- “I have an anti-theft device on my vehicle.” Point out any safety features on your car as well. Anything that makes your car safer on the road and less attractive to thieves will make your premium go down.
- “I’m willing to insure my (home, RV, boat, etc.) with you as well.” Ask about bundled package deals, but evaluate each on it’s own merit.
- “I haven’t had any tickets or accidents in X years.” Good, safe drivers are cash cows for insurers. Just make sure the “X” is at least 10.
- “My child IS on my policy, but she makes good grades and has taken a driving course.” Good student discounts are a parent’s friend!
- “I don’t drive very much and I take the bus to work.” Low annual mileage can pay off in another discount.
- “I have multiple vehicles to insure.” More than one opportunity to collect premiums usually means yet another discount.
You CAN save a bunch of money on your car insurance but it will take a little work.
If you’re curious about whether you’re paying too much for your auto insurance coverage, head over to InsureMe.com and get a free quote from highly reputable companies like State Farm, Travelers, the Hartford, AllState, Farmers, Liberty Mutual, Nationwide and American Family. It’s free to check whether your current agent is ripping you off!