What Affects Your Car Insurance Rates?

car insurance and what affects your car insurance ratesWhen you get behind the wheel to head to work, school or just out and about, it’s pretty uncommon to think about your insurance policy in and of itself. However, the rates that you are paying are common frustrations, especially when a term renews and you discover that your policy amount has increased significantly, or at all. It leads many people to think: “Why does my car insurance keep going up?”  Here’s what you should know.

Car insurance premium variables

Car accidents and your driving history

First and foremost, your insurance rates will go up if you are in an accident.  This is even more so if you are determined to be at-fault. Your driving record has a large connection to the rates that you’re charged because your history determines how much of a risk you are going to be in terms of filing a claim.

Car insurance deductibles

If you have lower deductibles, you’ll also find that your rates may be higher.  This is because your insurance carrier will be responsible for paying more out if you need to have a repair done.  So, the more they pay in the shop, the more you pay for your policy.  If you want to reduce your rate, consider asking about paying higher deductibles. Further, it also depends upon how much insurance you carry – like more than required or maybe not having all pieces of a vehicle insurance policy because it may not be required.

Your credit score

This often shocks most people who are learning about policies.  After all, what does a credit score have to do with insurance rates?  The reality is that there’s a strong connection between them.   When a policy is activated or renewed, there is a check on your credit score.  The lower your score is, the more risk and the more likely you are to file a claim with your insurance carrier.  This isn’t the case with everyone who has a low credit score, of course, but it is the case as far as policy carriers are concerned.  Working on bringing your credit score up could be helpful for your insurance policy premium as well as your financial health in general.

Big cities = more auto insurance claim potential

Living in a big city also means that your car insurance rate could be higher than someone who lives in a rural setting.  Take Houston for example, the 3-4th largest city in the US. It is going to have a higher risk because there are more people and more cars on the road, than say a small “podunk” city. The denser an area is, the more likelihood for accidents, collisions, and/or theft and vandalism.  All of these factors will bump up your premiums, which can be frustrating for those who are stuck with affordable living spaces in very dense areas.

Your vehicle itself

Last but not least, what you’re insuring could also impact your rate.  The fancier and newer a car is, the higher a repair or replacement bill is going to be.  If you are driving around a brand new, most recent model with all sorts of bells and whistles, it will cost more than the 7- or 8-year-old vehicle that you were insuring just before.  Each kind of coverage will also cost you more, especially if you are required to finance your car that requires full coverage while it’s being paid off.

While insurance rates are going up for everyone in the most recent years due to climate, distracted driving, car manufacturing and the simple cost of living, some elements will drive up your rates more than others.  This will help you understand a bit more.

And of course, Paula Smith Insurance is happy to help you with your insurance questions, a review of your insurance coverages, or even a free no-hassle quote. Contact us at (281) 488-8880 or fill out our contact form!

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