There are many factors that may contribute to an increase in your auto insurance premium. You have some control over a few causes but not all. Here are a few to consider:
- You may not be bundling your homeowner, auto, umbrella, boat, life policies, etc. with the same carrier. The more insurance you place with the same company, the cheaper the total price tag can be. Find an agency you trust with good customer service to handle all your insurance needs and take advantage of those multi-policy discounts.
- If you’ve had insurance cancel in the past for non-payment or failure to supply the insurance company with requested information, your premium may rise. Unfortunately, if this happens you are considered a risk. Be sure to open and read all correspondence from your insurance company whether it be an email, snail mail, text, etc. If the information isn’t clear, call your agent for help. Setting up your bills on automatic payments might make keeping up with due dates much easier.
- Mileage is used to calculate how many miles you drive annually. Those who commute will be rated differently than those who drive less frequently. Tally up how many miles you currently drive each year and provide that information to your insurance agent especially if the amount increases or decreases significantly.
- Youthful drivers will definitely cause your premium to increase because of the obvious risk. They have less experience than older drivers and many times take bigger chances. Driving with other peers in the car, distracted driving, driving while drowsy and speeding are unfortunately common in younger drivers. Check with your agent about any discounts offered such as a good student discount for teens who maintain excellent grades. Set firm boundaries with your child about the number of passengers allowed in the car and have a serious discussion about what to avoid behind the wheel. Also remind him to always buckle up.
- Your claims history is a big factor in determining your premium. Sometimes a large claim payout can lead to an increased premium. If filing a claim, be honest and file only for what is damaged or stolen. If an accident is not your fault, make sure the records reflect a not-at-fault accident.
- Some cars are more costly to drive than other models. This has more to do with the cost to repair a specific vehicle than your personal driving record. If more claims are related to a certain make and model, the insurance premium on that particular vehicle will increase. There is not much you can do about having a vehicle safety discount removed for this reason.
- Let’s be honest. If you are a bad driver, you are obviously a higher risk. When quoting your insurance, an agent requires your personal info, including license number and address. A good agent will search your driving history and if tickets or accidents show up, your rate will be higher up front. If you purchase insurance without the agent knowing of your history, when the insurance company discovers prior tickets or accidents, the premium will increase because that information will be taken into consideration. This is another reason to make sure that a no-fault accident gets filed as such. The best thing you can do regarding your record is to improve those driving skills and avoid tickets and future accidents.
- Lastly, believe it or not, your address also determines your premium. When facing a move, consider that if you reside in a densely populated area your premium will be higher. Insurance companies use data to determine the frequency of accidents in certain areas as well as theft and vandalism rates. In an urban vs rural competition, rural always wins.