Auto insurance is a necessity to ensure that you and your vehicle are both properly protected, but when the price of your policy is high, it can make you wish that you didn't have to pay it. The high price can even be confusing if you have never been involved in an accident or received a ticket. While accidents and tickets are factors that play into the policy cost, the premium of your policy is determined on a variety of factors outside of your driving habits. If you have a high premium rate with a perfect driving record, here are a few factors that may be causing it.
Credit Score
One factor that many people don't realize that impacts the price of their auto insurance policy is their credit score. Usually, your credit score only impacts you when you are signing a long-term contract like a loan request or a lease. The insurance company uses your credit score to identify any type of risky behavior. To them, if you have a poor credit score, you aren't very good at making solid decisions, which could essentially lead to irresponsible driving habits. While this may not be the case, this is the way the insurance company looks at it.
Marital Status
Your insurance rate can also be affected by your marital status. Generally, if you are married, you will have a lower rate than someone who is single. Typically, this is due to the fact that married couples can receive discounts that singles cannot. At the same time, though, couples are viewed as less risky drivers because they are more cautious since they are statistically older. Of course, the underwriting process is automatic, so if you have gone through a divorce, have lost a spouse, etc., make sure to let your insurance agent know so that he or she can pass that information along to the underwriter.
Home Location
A third factor that plays a role in auto insurance premium rates is where you reside. If you live in an urban area, you can expect a higher rate since cities tend to have a higher rate of burglary and theft. In addition, city roads are heavily trafficked, leading to a higher risk of an accident. You may be able to control the insurance costs of living in the city if you have a high-tech security system or live in a gated community. Letting your insurance agent know about these things can help you receive lower auto insurance quotes.
Share14 May 2019
I still remember the first time I had to chose an insurance policy; I was 17 years old and had just saved up enough money to afford my very first car. I was so excited to begin driving, but overwhelmed with all of the different auto insurance options. My father helped me chose a full-coverage policy that would cover the cost of my car if it were to become damaged in an accident. When I inevitably caused a small fender-bender as a new driver, my insurance company paid for my car repairs, so it sure was the best policy for me! Now that I am older and have learned a lot about home insurance and other types of insurance, I thought I would make a blog to help others who need insurance advice, like what my dad gave me. I hope I can help you make wise insurance decisions!