Why is my auto insurance so expensive?
You are wondering why is my auto insurance so expensive and looking out whether you’re overpaying—and what you can do to cut your costs? Your auto insurance prices are a reflection of you in certain respects, with premiums dependent on variables like your driving record and where you reside.
There are a number of reasons why your rates may seem to be excessively expensive or have increased in recent months. There are, fortunately, methods to lower those rates again.
- Many variables determine how much you pay for auto insurance, including your driving record, your vehicle, and where you reside.
- Your insurance prices may be influenced by your credit score.
- Taking a defensive driving course or looking around for a better offer might help you save money.
What Factors Affect the Cost of Auto Insurance?
Despite the fact that almost every state mandates drivers to have a certain level of liability coverage, drivers have a lot of freedom when it comes to the quantities and kinds of coverage they choose on their vehicle insurance.
According to a recent study by the website Bankrate.com, full-coverage vehicle insurance costs an average of $1,674 per year, or $139.50 each month. Liability, comprehensive, collision, and uninsured/underinsured motorist coverage were all included.
Of course, that’s only an average, and the amount you pay might be greater or lower based on a variety of circumstances, including:
- Your driving history
When you seek a quotation from an auto insurance company, one of the factors they consider is your driving record, which includes any traffic fines or accidents you’ve had. If you have a clean driving record, your insurance prices will be cheaper. If you have a history of accidents, a DUI, or other instances of bad driving conduct, your insurance premiums will increase.
- Your residence.
Insurance rates may vary significantly from one state to the next, and even within the same state. If you live in a high-crime neighborhood, for example, your insurance may raise your premium because it feels you’re more likely to submit a claim for theft or vandalism.
Maine has the cheapest full-coverage prices, at $965 per year, while Louisiana has the most costly rates, at $2,724 per year, according to the report.
- What is your age?
Younger, inexperienced drivers pay higher auto insurance premiums since they are thought to be more likely to be involved in an accident than older drivers. If a young driver is covered under a parent’s vehicle insurance, the parent’s premium may be affected.
- Your sexual orientation.
Women are more likely than males to have fewer and less severe vehicle accidents, thus they pay less for insurance.
- Your credit rating.
Although the link may not be as evident as it is with some of the other criteria, having a better credit score frequently leads to reduced vehicle insurance costs. This is because many vehicle insurance companies view your credit score as a proxy for your level of responsibility.
- Your automobile.
Your insurance premiums will be much higher if you’re driving a super-expensive sports vehicle than if you’re driving a conventional sedan. This is because, in the event of an accident, the former will cost more to repair or replace than the latter.
The general safety record of your automobile, as well as particular safety features, are factors to consider. In addition, the Insurance Information Institute claims that “Insurers consider not just how safe a vehicle is to drive and how effectively it protects its passengers, but also how much harm it may do to another vehicle.
An insurer may charge extra for liability insurance if a given car model has a greater risk of causing damage in an accident.”
Even if you don’t believe your vehicle insurance rates are too exorbitant, it’s worth checking around every year or two to see if you can get the same coverage for less money from another insurer.
What Can You Do to Save Money on Car Insurance?
- Drive with caution.
If you remain out of problems on the road and don’t file any significant claims with your insurance, your premiums may decrease over time. Many insurance companies now utilize telematics technology to track drivers’ speed, acceleration, braking, and other parameters, and reward them with reduced premiums if they drive safely. If you’re okay with it, it could be worth looking into.
- Improve your credit rating.
Because your credit score is frequently a deciding factor in your insurance costs, any steps you take to enhance it might pay you. This credit score improvement advice comes from here.
- Attend a class.
Many vehicle insurance companies may give you a discount if you take an authorized defensive driving course. If you’ve been charged with a DUI or another crime, you may be obliged to complete a course.
- Combining your insurance coverage is a good idea.
If you purchase your car, homeowners, or other insurance from the same firm, you may be eligible for a discount.
- Take a look around.
Car insurance is a competitive sector, and providers are always looking for new consumers. You may enter your information and compare prices on a variety of websites. If your insurance rates have lately increased, it may be worth contacting your existing insurance provider or agent to find out why. If they want to maintain your business, they may offer some recommendations for decreasing your prices, such as additional reductions you may be eligible for.