Ask the people you know how much they pay for car insurance, and you are likely to get a wide range of answers. When it comes to determining the cost of coverage, most insurance companies use unique formulas to assess their perceived risk of insuring a particular driver. Those formulas take into account certain variables that influence your final rate. While insurance companies tend to consider many of the same variables, they do not weigh them all equally. Continue reading to learn what types of factors could be working for or against your premiums, and what you can do to optimize your savings without sacrificing the value of your coverage.
Insurance companies consider the age of all drivers on your insurance policy – not just the age of the primary policyholder. If you add a young driver to your policy, for example, you could see a big spike in the cost of your premiums since teen drivers tend to be in accidents three times as often as older, more experienced drivers. Likewise, drivers who have spent many decades behind the wheel may be awarded money-saving discounts due to their lower risk of accidents. Rates will also begin increasing again for drivers after 80 years of age due to much higher likelihood for driving violations.
When you shop for a new car, consider how the make and model you choose might affect your car insurance premiums. Will you pay more for comprehensive coverage if your vehicle is listed as one of the most stolen models? Will it cost more than average for insurers to repair your vehicle if you need to file a claim? Conversely, perhaps your vehicle has safety features that reduce the risk of insuring the car. For example, many insurance companies offer savings for drivers with vehicles equipped with airbags or anti-theft devices.
Credit scores are not just for lenders and landlords; insurance companies take an interest in your financial history, too. A low credit score could indicate a higher risk of filing a future claim or being responsible for an accident-related liability. Because of that, some insurers charge as much as double the premium for drivers with low credit scores as opposed to those with excellent credit.
You know about your credit report and your driving record, but there may be one other consumer report you haven’t heard of: your CLUE report. This lesser-known report is important to most insurance companies since it reveals information about your past claims activity. Whether your claims were paid or denied, all of it shows up on your CLUE report. For most insurers, it is not the number of the claims you file, but rather the number and frequency with which you file claims that matters. If you have multiple claims in the past five to seven years, you could face higher premiums than a driver with only one or no recent claims.
There are many other things that insurance companies may consider when calculating your premiums. Examples include:
- Your gender, occupation, and marital status
- Where you live and if you own your home
- The number of miles you drive each year
- The primary reason you drive your vehicle
- The violations and citations on your driving record
- And more
Shop and Compare Rates with an Independent Agency
Here at Insurance Innovations, Inc, our team is fully committed to serving our customers with ample coverage at competitive rates. Our number one goal is to ensure you are fully protected against accidents, injuries, and liabilities that could threaten your income and assets. As an independent agency, we shop around to find coverage from some of the most reputable insurers in Wisconsin until we find a policy that meets your needs. Contact us today for more information and to request your free quotes. We look forward to serving you soon.