12 Basics of your car insurance rate
Astounded by the amount of your car insurance rate? Uncertain of what factors are influencing your premium?
There are no less than 12 components to do with you, your car, where you live, and your driving that can impact the cost.
1. Your location
First thing is where you and your car live, it has a major say on your car insurance rate.
For instance, the higher populace thickness of urban areas will expand your rates. More individuals imply more drivers on streets, so more potential for mishaps.
Insurers will also look at crime in your area to establish the risk of your vehicle being stolen to calculate your premiums.
2. Your age
Your car insurance rate will change depending on your age.
The general pattern for premiums is that drivers under 25 or so normally pay more. This is because insurers see younger drivers as more likely to be in accidents.
For older drivers, their premium tends to decrease, rising again only for drivers over 60 or so.
3. Your gender
Women tend to see a lower car insurance rate than men – particularly at younger ages.
Until age 21 male drivers will pay about 20% more, but the picture is much more mixed for drivers over 30.
4. Your marital status
Insurers view married people as less likely to have accidents.
Married couples can also find savings by combining their policies and bundling types of insurance together. You get a lower car insurance rate if you have a tenant insurance with the same company.
5. Your driving experience
Like age, the idea here is that the longer you have been driving for, the more experienced – and therefore safer – you will be.
So your car insurance rate won’t automatically drop once you’re over 25. If you only got your license at 24, you might have to gain a few more years of experience first before you see an impact on your premiums.
6. Your driving record
A clean driving record will generally mean lower car insurance rate, as your record is another way an insurance company decides if they think you’re a safe driver.
7. Past insurance claims
Any previous claims you made could play a role – especially if you were the at-fault driver.
The amount of the claim and how many claims you make can also matter. If you frequently make insurance claims, you will seem like a bigger risk to insure.
8. Your credit history
Insurers argue that there is a correlation between credit score and a person’s driving behavior.
However, studies suggest credit has a disproportionate impact on car insurance rate.
According to a Consumer Reports study, a poor credit score could push your premiums up more than a DUI (driving under the influence) would.
9. Previous insurance coverage
Insurers prefer drivers that have a continuous insurance history.
It doesn’t have to be with the same insurer, just as long as you were insured.
This is particularly key if you are switching car insurance companies.
Make sure you have your new insurance all set before you cancel your old one. Otherwise, you risk having a gap in your insurance.
10. Your car model
Firstly, the value of the car. If your car is worth more, it will cost more to insure. Your premiums will be higher for newer cars.
Secondly, insurers also look at whether that model has been in more accidents, or is stolen more often.
The safety technology also plays a big part. While this can help mitigate collision damage, the features can also make your car more expensive to repair, which pushes premiums up.
11. Your car usage
The number of miles you drive in a year is a key consideration for insurers.
However, the impact is mixed.
While driving more miles per year generally means higher premiums, CFA research suggests that drivers who don’t drive a lot don’t see major savings in car insurance rate.
If you use your car for business reasons, or if you drive for a ride-share service you will need to pay more for your insurance.
12. Coverages and deductibles
If you have a liability policy with only the province minimum coverage limits, this will cost you less than if you pay for full coverage.
With collision and comprehensive coverage, your deductible will influence your cost. A higher deductible will reduce your car insurance rate.
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