10 Reasons Why Your Car Insurance is So Expensive
“Why is my car insurance so expensive? Why does my car insurance keep going up?” Millions of people have asked themselves these questions whenever they make an installment payment or are shopping for affordable car insurance. These are fair questions to ask, especially since more and more people are looking for low-cost car insurance coverage.
However, many people aren’t aware of the factors that could result in a higher auto insurance premium. Your driving record or circumstances that aren’t in your control can raise the price of your premium dramatically. Here are some reasons why your car insurance is more costly and what you can do to lower the cost of your premium.
1. Your Age
Young driver insurance is pricey. Due to a combination of the lack of experience on the road and lack of overall maturity, many insurance companies feel that younger motorists can pose a higher chance of being involved in a collision. On top of that, teen drivers account for 11% of the total costs of motor vehicle injuries according to the Center for Disease Control and Prevention, so many insurance companies consider them a higher risk due to that statistic. Plus, drivers aged 16 to 19-years-old are three times as likely to be in a fatal crash than a driver that’s 20-years-old or older.
Unfortunately, until these statistics change, there’s nothing you can do to lower your insurance rate until the driver on the policy turns 25-years-old. That said, some insurance providers may provide a small discount if the young driver to attached to their parent’s policy, especially if the parent has been doing business with the insurance company for decades.
2. The Garaging Address of Your Vehicle
The location of your vehicle can affect your car insurance rates. Weather patterns, the local crime rate, and the number of claims made within the vicinity of your car’s garaging address are all factored into the price of your premium. If you move into a heavily populated city rather than a spread-out suburban area, you’ll likely see your rates go up based on these factors. If a place has a more unpredictable climate, you could experience a rate increase due to the risks of a hurricane, snowstorm, tornado, or other damaging weather phenomena. If you are moving to a new location, talk to an insurance agent to see how much your move will affect the cost of your overall premium so you can shop and budget accordingly.
3. Your Vehicle and Its Usage
The type of vehicle you drive and how often you use it can exponentially affect the cost of your auto insurance premium. The more expensive and desirable the automobile, the higher the risk of it getting stolen and the higher the cost for repairs. If you drive your car for a long commute to work, you have a higher chance of getting into a collision compared to someone driving the same car only for weekend drives in the country. No matter how clean your car history is, your rates will be higher the more miles you put onto a vehicle.
If you need a newer car but don’t want your insurance premium to soar, consider getting an efficient, modest vehicle that boasts a good safety rating. That will encourage insurance providers to offer you a more reasonable rate.
4. Your Marital Status
It may seem unfair, but the numbers don’t lie. Statistically speaking, married people get into fewer collisions and have fewer traffic violations than people who are single. With that mind, insurance companies see married couples as a safer bet than people who are unmarried.
5. Your Credit Score
If your credit is bad, insurers may only offer you high-risk auto insurance rates. Regardless of your driving record, poor credit automatically makes you seen as a higher risk for insurance companies. Once you’ve improved your credit score, talk to your insurance provider to see if they would be willing to cover you at a lower premium.
6. You’ve Cancelled a Policy in the Past
Not fulfilling a current insurance term and canceling it prematurely not only hurts your relationship with your insurer, but other insurance providers, too. Regardless of the reason, when another company sees that you have a cancelled policy in your past, they will be hesitant to cover you and will likely require a higher cost to cover you. Your best bet is to discuss with an insurance agent the reasons why you previously canceled a policy to see if they are willing to negotiate to a lower premium cost.
7. You Haven’t Bundled Your Policies
Most insurance companies are willing to offer lower car insurance premiums if you are willing to do other business with them. See if you can get a discount if you bundle your car insurance along with a homeowners, renters, or life insurance policy. This can not only lower your auto insurance rate, but the cost of other coverage could go down overall since you have bundled all of your policies together.
8. Low Deductibles
It’s basic math: the more you spend out of your pocket before your insurance kicks in, the lower your overall premium will be. Having a low deductible is helpful if you are in a collision since you don’t need to pay a lot before your insurance coverage activates. However, you’ll be paying much higher premiums overall since your deductible is so low. If you are a safe driver or don’t drive often, you could likely get away with adjusting to a higher deductible and take a risk on yourself which would put your premiums at a lower overall cost.
9. You’ve Made Claims That Resulted in Big Payouts
For some insurance companies, seeing a large payout for an accident or theft encourages them to raise your premium, regardless of whether or not it was your fault. Your best bet to avoid a much larger premium payment in the future is to only claim what was damaged or stolen without embellishment. Also, if you’re involved in an accident and it wasn’t your fault, make sure that your records has it listed as “no-fault” to avoid unnecessary premium increases.
10. You Have a Poor Driving Record
Car insurance for people with accidents, violations, or other bad marks on their driving record can make insurance companies view them as high-risk drivers. Folks with an extremely poor record will have to get an SR-22 to legally drive. There are high-risk auto insurance companies like Freeway Insurance that specialize in helping drivers obtain low SR-22 insurance costs, but many companies charge a higher premium based on your past if you were previously in an accident and were at fault, commit too many traffic violations, or were given a DUI. If you improve your driving record over time, you could convince insurance providers that you will not repeat your past mistakes, leading to lower-cost premiums in the future. All it takes is time.
If you’re one of the people wondering, “Why is car insurance so expensive?” you’re not insured by Freeway. Freeway offers the lowest rates, even for drivers who have a bad driving record. Why pay more than you need to for auto insurance? Get cheap car insurance online from Freeway Insurance quickly and easily and find out how much you can save. Or, give us a call at (800) 777-5620 and our friendly, experienced agents will help you find the best car insurance at the lowest price.