Top 10 Factors that Affect Your Auto Insurance Premium
Insurance companies use a variety of factors to determine how much you will pay for your car insurance based on the level of risk to the company. The riskier you appear, the more you will pay for car insurance. The safer you seem, the less you’ll pay. Not all companies consider the same factors with equal weight, which is why it is important to compare rates and services of different insurance companies. Here are some of the main factors that affect your premiums.
Vehicle Type
Expensive or high-performance vehicles generally cost more to repair or replace. Such vehicles may also be inviting targets for thieves. Insurance companies usually charge a higher premium for coverage of these vehicles.
Driving Record
Insurance companies consider your driving history when determining rates. If you have had accidents or received tickets in the past, an insurance company may choose to issue your policy at a higher rate or may refuse to issue a policy at all, depending on the number and type of accidents and/or violations.
Vehicle Use
The distance you drive to work, or school may affect the cost of your insurance because it determines your daily exposure to risk. Increasing or decreasing the number of miles driven each year can cause your premiums to increase or decrease. Also, changing vehicle usage (from personal to commercial) can affect the amount of your premium.
Geographical Location
Insurance companies consider vehicle and population density, road conditions, repair rates, medical and hospital costs and the number of accidents in a particular area.
Gender
Statistics show that males suffer more than twice as many fatal accidents as females. Insurance companies typically charge higher premiums for males, especially those younger than 25.
Age
Statistically, Florida drivers younger than 25 or older than 65 make up a larger share of people involved in accidents, and this is factored into the decision to charge higher premiums.
Credit History
Under the Federal Fair Credit Reporting Act, credit reports can be used for insurance underwriting. However, there are factors within the credit report the insurance company may not use in their underwriting or rating when reviewing a person’s credit history.
Deductible
You may choose to increase your deductible in order to reduce your premium but remember that you must pay this amount out of pocket each time you submit a claim. Carefully consider how much of a discount you will receive for a higher deductible and how much you can afford to pay out of pocket on each claim.
Older Vehicles
Since claims for damage to your auto are normally paid based on actual cash value (considers depreciation), you should consider the current value of your vehicle to determine whether or not the amount of coverage is worth the premium. You may want to remove Comprehensive and Collision coverage unless there is a lien holder, such as a bank, that requires it.
Restraint Systems and Anti-Theft Devices
Companies may offer discounts for certain equipment such as anti-lock brakes, air bags, anti-theft devices or vehicle-recovery systems.
After any type of crash, you should consider talking to a car accident lawyer to learn what your rights and obligations are under the law. Let the personal injury attorneys at Suarez & Montero review the circumstances of your case and discuss your legal options. Our attorneys are ready to provide proven legal representation in pursuing your claim and stand ready to protect your rights.
Contact us today at 786 Lawyers for a FREE consultation!
