Nobody likes car insurance.
Oh, we love having it when we need it. Nothing is quite as relieving as knowing that your insurance company is there to help when an accident happens and your vehicle needs repairs. Even just knowing you have coverage makes you feel a bit more secure. Your vehicle is how you run your errands, transport your family, and even get to and from work. To say it’s a central part of your life would be fair.
But there are things about car insurance that we hate. Premiums are never fun and watching them increase is the worst part. Sometimes we know exactly why they went up. We got into a car accident or received a speeding ticket and we watch our insurance rates go up. Other times they just seem to go up out of nowhere.
At Help2Cover, we’re always trying to help our friends and neighbors better understand the complicated world of insurance. This month that means we’re diving deep into the factors that impact your car insurance rates…both the factors you can control and those you can’t.
Let’s get started.
Factors You Can Control
When it comes to car insurance rates we’ve all heard about things that affect them. Most people are keenly aware of many of these factors after years of driving and having car insurance. But we’ve found that some people have heard urban legends about car insurance rates such as red cars having higher rates than other colors. (Just to be clear, while your insurance company does consider several vehicle factors, color isn’t on the list.)
So we just wanted to take this opportunity to share some of the factors you can control that impact your rates.
Your Driving Record – Yes, the number of accidents and traffic violations impacts your rate. More of them will lead to higher rates, potentially even if the accidents on your record weren’t your fault. This is why it’s very important to make sure you know who was at fault for a given accident and make sure your driving record is accurate.
The Amount You Drive – While this might sound surprising to some, the reasoning is pretty simple. The more you drive, the more opportunity for accidents you have. Driving less is likely to reduce your premiums.
The Car Your Drive – We all know this one. If your car is newer or more expensive, insuring it will also be more expensive because it will cost more to repair or replace the vehicle. Older, less expensive cars will cost less. Also, cars paid off tend to cost less because you no longer need gap coverage to insure the loan.
Adding a Driver – Additional drivers mean additional risk which often leads to higher rates. The highest rates in this situation are usually related to adding a teenage driver to the policy. Teenage drivers are the highest risk category for car insurance so add that to all the other factors and you will quickly see higher rates.
(Insurance Pro Tip: If your teenage driver makes good grades, they may qualify for discounts from many insurers. Just another reason to keep them in the books.)
Your Credit Score – It seems like your credit score impacts just about everything these days. Car insurance is no different. When companies determine your rates they calculate a personal insurance score for you and a major part of that is your credit score. Better credit scores mean better rates. It’s as simple as that.
(Insurance Pro Tip: Doing an annual review of your credit report and making sure all of the information on it is accurate is a great way to save some money on insurance and so much more. Make sure you’re being judged on the right stuff.)
Factors You Can’t Control
It might surprise you to find out that there are factors beyond your control that impact your car insurance rates. If you’ve ever had a mysterious increase in your premiums, one of these factors is probably the reason. Here’s a list of those factors beyond your control to help you out:
Inflation – Inflation impacts everything including car insurance. Why? Well, car repairs get more expensive due to supply change and labor shortages. Inflation makes these even worse and the insurers account for these increases when determining rates. So, during periods of inflation, the odds are your premiums will go up and it has nothing to do with your driving at all.
Statistics Around You – Where you live impacts your insurance in several ways. When insurers calculate risk, they consider factors in your area such as crime rate, natural disasters, number of accidents, amount of fraud, and the number of uninsured motorists. You can do everything right and these factors can lead to an increase or decrease in your rates.
For example, if the crime rate goes up your insurance will probably go up. If the accident rate goes down your insurance will probably do the same. Understanding this can help you better know what to expect and help you look for discounts for safe driving or the installation of certain anti-theft devices as well.
Shifting Discounts – When you signed up for your car insurance you may have received a new customer discount. Other discounts may have been applied for other reasons as well. But discounts are always shifting and sometimes you may find yourself without them. Your insurer should provide you notice of this before it happens, so it’s important to pay attention to those notices and seek the help of an insurance pro if you have questions.
Helping You Better Understand The Insurance World
Insurance is a complicated topic. The field is constantly changing every day with shifts in the economy and new policies from the government added to a mix of constantly shifting hazard conditions. Trying to keep up with it can drive you crazy. Especially when you pile that on top of your normal life. How do you even begin to keep up with it all?
Fortunately, you don’t have to. Trusted insurance advisors like those here at Help2Cover can help you navigate the complicated world of insurance and help you get coverage that provides you with the protection you need to fit your budget. If you have questions about your insurance coverage or need help finding coverage, contact Help2Cover today.
We’re ready to help you.
At Help2Cover (H2C), we understand that insurance goes hand in hand with solid financial planning. H2C Insurance Agency was founded by a group of professional insurance and financial planning experts. With years of experience in the industry, we have a deep understanding of the importance of comprehensive coverage and strategic financial guidance. We go beyond traditional insurance services. We strive to provide holistic solutions that integrate insurance protection seamlessly into your broader financial goals. Whether you’re seeking personal insurance coverage or business insurance solutions, our dedicated team is here to tailor a plan that aligns with your unique needs.