Car insurance can be expensive, depending on the individual and the vehicle being insured. Auto insurance companies use many different factors to determine what each person must pay for their car insurance premiums. There are many things that you as a consumer can do to lower your rates, but sometimes, car insurance companies will lower the premiums for you.
Insurance companies use a process called underwriting to calculate insurance rates. These underwriters review the make and model of the vehicle, whether it is being used for pleasure or to driver to and from work, the annual distance driven, and the driving record of the individual. If a person has several traffic violations or at-fault accidents on their record, these will affect insurance premiums for several years. Usually, tickets stay on for about three years and accidents stay on for about six years. Once this time has passed, the insurance company will review the policy at renewal and possibly drop the car insurance premiums.
As well, at renewal, some insurance companies will reward long time clients with renewal discounts if they have kept their business at their agency for a certain number of years. As each renewal period arrives, the car insurance rates will gradually decrease.
Once a driver reaches a certain age, they will qualify for a senior discount, thus resulting in lower premiums. As well, young drivers are charged higher rates because they have little or no experience driving. They pose a higher risk to be involved in an accident or to file a claim than someone who has been driving for years. Once a person reaches the age of 25, the insurance company will usually drop their rates. By this time, they have several years of driving and this experience should reflect on their driving habits. Usually, these premiums are applied at the renewal period. If you are single, chances are your premiums will be more expensive than someone who is married. This is because insurance companies believe that married people are more responsible and less likely to be involved in accidents. They have different priorities than single people and are less likely to drive in a reckless manner than someone who is single. When you are married, your insurance company will note this on your policy and will decrease your rates.
When you obtain auto insurance, always review the coverage with your insurance agent and discuss what steps you can take to lower the premium. Sometimes, certain factors are unavoidable but there are some that can be altered in your favor. So, if your rates are a little high, don’t despair; you and your insurance company can both play a part in lowering the amount you pay each year.
