Car insurance is one of the fastest growing insurance niches in the world. With this growth, each insurance company is improving their operations to accommodate clients’ expectations. One of the key areas in this growth is a better approach to insurance rates. Contrary to popular belief, insurance rates are now carefully calculated as opposed to having general rates. The golden rule in this niche is the riskier the plan, the more the rates but in the last couple of years, cheap auto insurance online has challenged this notion with better and well-thought policies.
The following are the ten main factors that affect your car insurance rates.
- Marital Status
Did you know that your marital status could affect your insurance rates? Statistics have shown that married people are careful drivers compared to single individuals. The same notion applies to divorced and couples that have separated. When deriving an insurance rate, the insurer may reduce the rate between 5-15% depending on other factors to this class of people. While filling in the insurance forms, it is important to give the correct information on your marital status.
- Your driving experience
How experienced are you in driving? Insurance companies are keen on the number of years one has as licensed drivers. The more the driving years, the less they are prone to accidents. On this note, if a teenager uses the car, the insurance rates might be higher. However, older drivers pay less in terms of premiums because they are more careful on roads. Still on the driving experience, if you have never had an accident, the insurance company may lower your insurance rates.
- Driving record
Apart from your driving experience and your age, your driving record is a major factor when calculating your insurance rates. This shows that having a good record is unmatched when paying insurance premiums. Insurance companies are more willing to trust an individual with a good driving record because there are not likely to cause an accident.
- What kind of a car do you drive?
It is a reality that different cars have different values. The more the value of a car, the higher the insurance rate and the lower the car value, the lower the insurance rates. In some cases, the insurance company may consider the depreciation rate of a car in relation to the premiums.
- Your gender and age
It is surprising to note that gender and the age are some of the considerations insurance companies uses to calculate insurance rates. Male and female have different probabilities to be involved in accidents. Although this factor is not ‘black and white’ in policy papers, it is a factor. On the other hand, age is always a significant factor.
- Your profession
Different professionals have different probabilities to accidents. A journalist, for example, puts their car in more potential danger compared to a schoolteacher. An insurance company, in this case, may choose to lower the insurance rates for the schoolteacher to about 5-15%.
- where do you drive your car?
In the USA, different localities and states have different accidents statistics, and each area has a different crime index. The knowledge of the crime index, for example, assists the insurance in estimating the insurance rates. On the other hand, an urban setting with many people possesses a different accident rate compared to a rural setting with fewer people.
- How is your claim history?
Claim history is one of the first documents each insurance company reviews before structuring insurance rates. Different claim histories can influence the insurance company to structure different insurance rates. For example, a high claim history indicates that one is prone to accidents and crime incidents, which translates to higher rates.
- what is your credit score?
There are many uses of credit score, and calculating insurance rates is one of them. For better insurance rates, you must prove to the insurance company that you have a good record in settling financial obligations. With a good credit score, it is easier to get a better and reasonable interest rate.
- Do you have previous insurance coverage from another company?
Although this is rarely used in calculating insurance rates, it is sometimes necessary for the insurance company to understand your interaction with other entities. The better the relationship with other insurance companies, the better the insurance rates.