Many drivers don’t realize how driving to and from work during morning and afternoon rush hours affects their auto insurance rates. The fact is – if you participate in the daily madness, sharing the road with tired, edgy, impatient drivers on the constant verge or road rage, you are, in all likelihood, paying more for your auto insurance. While you may be a good driver with what might be considered a clean record, your insurance company looks at you as a potential accident just waiting to happen.
Those hectic miles you drive make you a higher risk of meeting up with a fender-bender, regardless of who’s at fault. Unfortunately, you fall into the statistic pool; the one depended upon by virtually all automobile insurers to categorize you in order to set your premium rates.
In addition to the amount of miles and time spent driving your vehicle, below are some of the factors that insurance companies base their rates on:
• Driving history
• Type of vehicle (make, model, and year)
• Location where you reside
• Is vehicle usage work related
Unlike other states, California does not permit insurers to use credit history to determine how much you should pay.
However, if you happen to be an 18-year-old male just handed the keys to a brand new and very expensive sports car…you would be considered extremely high risk to insure. Not because you might be a terrible driver but, again, you’re judged by what others in your category have done in the past. For that reason, your rates will be at the high end of the scale compared to a more experienced, 40-year-old female driver who putts to and from the market in a 2006 minivan.
In a scenario such as the one above, you’ve combined age, gender, driving history, and type of vehicle all for the sake of determining insurance rates. But, it doesn’t stop there. Remember – where you live in relation to where you work or attend school also comes into the picture and auto insurance companies study that picture very carefully.
Location versus distance is an important factor that commonly affects your rates. The less time you spend on the road – the less you’re likely to be involved in an accident. Your auto insurance provider looks at it as a lower risk for him, thereby, leading to lower rates for you. Conversely, if you’re on the road for lengthy periods of time or you have a long daily commute up and back through rush hour traffic – you can expect your rates to be considerably higher.
It’s just a matter of playing the odds; because you’re around more cars every day – the risk of you filing a claim is greater. And, insurance companies don’t particularly like to gamble, which is why they cover the risk by charging you higher premiums.
But, things aren’t all bad. In fact, there’s some good news for drivers who spend a lot of time behind the wheel during rush hour that’s worth looking into. Many insurance companies are beginning to offer auto coverage known as Pay As You Drive (PAYD) or Usage-Based Insurance. By participating in this form of insurance, you may reduce your rates.
PAYD insurance uses factors such as type of vehicle you drive – and, not only how much you drive, but also where you drive and the time of day you’re actually behind the wheel to calculate your premiums. So, when shopping and comparing for auto insurance, if you have a long, time consuming commute, check out a PAYD or UBI policy and you may save some money.
Whether you’re looking for Pay As You Drive insurance or standard coverage, make sure you’re getting the best rate on your auto insurance. Why not get a free auto insurance quote today?