Numerous factors go into your insurance premium – so many, in fact, that it can be difficult for the average person to keep up with them all. These factors access your risk as a driver on the open road, and the fewer or lesser they are, the cheaper your insurance policy will be. Although each of these factors varies in importance, it’s crucial to keep all 5 in mind, once you receive your estimate for your bi-annual insurance payment! Check them out below:
Age
When it comes to car insurance, age is a significant ranking factor. For example, a teenager, who is a new driver, is viewed as a riskier client than a 50-year-old. In fact, the cost gap between the two averages 5,500 dollars per year. This is because data has consistently demonstrated that teenagers drive more recklessly and get into more accidents overall than drivers of any other group.
Location
Like age, location functions as a major ranking factor with your auto insurance. You will be considered at both the state and ZIP code levels. Why? Well, car insurance is regulated at the state level, but it’s also priced on a more granular level by your particular location. Remember, insurance costs are higher in locales with more drivers, as well as ZIP codes prone to crime, natural disasters, and higher risk rates.
Insurance History
Unless you’re a brand new driver, you shouldn’t have any sort of lapse of insurance. Insurance companies look at a lack of continuous coverage as an indicator of high risk. While estimating your premium, in other words, insurance companies will take into consideration the time you may have been licensed without insurance – the longer the gaps, the steeper the costs.
Credit Score
Did you know that an insurance company will take your credit score into consideration when adjusting your insurance premium? Often overlooked, this factor is based on data from the Federal Trade Commission, illustrating that drivers with poor credit file more claims that are generally expensive! Therefore, drivers with low credit can pay up to an extra 1,500 dollars a year for their policy.
Type of Vehicle
Obviously, your new sports car is going to cost a little more to insure than your mom’s 2005 Honda Civic. Luxury cars have more expensive parts to replace, and an insurance company will take these replacement parts into consideration. Speaking of types of vehicles, your vehicle ownership status – whether it’s owned, leased, or financed – will also factor into your six-month premium rates.
As the saying goes, knowledge is power – and, at Oxford at Santa Clara Apartments in Pflugerville, Texas, we couldn’t agree more! We hope that this blog has presented you with the valuable information that you were seeking out.