What About YOU Affects Your Insurance Rate-Turns Out

If you’re wondering what your chosen occupation, the color and style of your car, or your home address have to do with qualifying for lower car insurance rates, the answer is-everything. Here are some areas of your life in which insurance providers are extremely interested. How and why they care is all about the level of risk you personally bring to their company. Take a look.

Your Driving Record

Threatening you with “that’ll ruin your record” isn’t just something your well-meaning parents made-up to scare you. Insurers identify people with clean driving records and fewer moving violations as desirable clients. Another number insurers look at when assessing your desirability is how many miles you travel in a year. The less you drive, the less time you’re on the road, the less opportunity for you to get into an accident and less risk exists for you to file a claim.

The Car

Insurers are thinking how costly your vehicle will be to replace and fix when they’re estimating how much to charge you on the insurance premium. According to the Insurance Information Institute, your car’s sticker price, the storage location, and the probability of it being stolen- are all factors they consider when determining how much it will cost to insure it. It’s not hard to figure out that it will cost the insurance company a lot more to replace a $225,000 2010 Ferrari than a $17,000 Nissan Altima.

Risks and Patterns of Behavior

Your age, occupation, and place of residence all carry a level of risk to insurers. Insurance companies decide how much of a risk you pose by studying patterns of claims from people of similar ages, occupations, and places of residence. If you looked at the number of claims against a teenage boy versus a 40-year-old man for instance, who do you think would have the lower premium and get cheap car insurance? A 40-year-old man is less likely than a teenage boy to file a claim, which is why it costs more to insure boys than men over a certain age.

Road Warriors are Less Desirable Risks

The reason your occupation matters is that this fact tells insurers how often you will be on the road. If you are a regional sales representative, you’ll be on the road significantly more than someone teaching at a local school. Again, insurance companies see drivers who spend a lot of time on the road as a higher risk than those who travel in town or work from home.

Where You Live Matters

It’s not just about keeping up with the Joneses’ when it comes to choosing your neighborhood. Where you live can affect your insurance rates. Where you live affects the amount of thefts, car accidents, and lawsuits that you’re susceptible to. Your location also determines how expensive it will be to pay off your medical claims because of the average cost of care at the hospital in your area. Insurers care about what car repair shops in your neighborhood charge as well-all these factors contribute to a pattern of risk.

The Features
The cost of your insurance premium will also reflect the number of features and benefits you choose. The more coverage you want and the lower your deductible, the higher the cost to you.

Credit Scores Still Count in Some States
Your credit score may or may not affect your insurance premium. Some states have passed regulations against the practice but many states still use your credit report to help them determine your level of risk.

What Can I Do? I Can’t Change Jobs…
Obviously you can’t change your age, or where you live, but there are some things you can do to make yourself a more desirable client for insurance providers and as a result eligible for lower insurance premiums.

1. You might consider pay-as-you-drive insurance programs. It could save you money because as your personal statistics “improve” so do your rates. For instance, a teenager who doesn’t speed and get tickets can get a better rate than average teenagers his or her age that don’t pay as they go.

2. Drive more carefully. More cautious drivers get into fewer accidents.

3. Buy a car that won’t cost much to replace. How do you know your car will cost less to own? Examine these factors to see what your cost of ownership would be over five years:

  • Depreciation
  • Interest (if financed)
  • Taxes and fees
  • Insurance Premiums
  • Cost of fuel
  • Cost of repairs
  • Potential federal tax credit

4. Look at your current plan and see where you might trim the fat. Maybe you don’t need all of the original features you got when you signed the policy for the first time two years ago. Think about paying a higher deductible to save more on your monthly rates.

Turns Out…Being a Male Doesn’t Cost More

According to the Insurance Information Institute, the only personal trait that doesn’t matter when it comes to insurance rates? Gender. It turns out that insurance providers don’t see male drivers as a higher risk than their female counterparts.

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