Understanding why auto insurance premiums are very expensive

Today we all complain about the high cost of living. It seems like everyone who owns and drives a car is hit with a hefty dose of bills to wrestle with: car purchase costs, fuel costs, maintenance and repair costs – and the super BIG ONE – auto insurance premiums.

If you haven’t already articulated it, the glaring question in your head is undoubtedly underlined: why does car insurance (read car, truck, motorcycle, camper and so on) have to be so very, very expensive?!

The answer to all things insurance comes from the industry itself and this one is no exception.

“Insurance rates vary from person to person and are based on a few factors,” says a well-known specialist who works in the Tri-State area and is employed by an independent agency. “It all comes down to how much risk you run as a driver.”

Eight Factors That Can Affect Your Auto Insurance Bill

Some of the things that determine how much you pay for auto insurance are listed below.

• What type of vehicle you are driving

There is a clear difference between makes and models of cars in terms of safety. In addition, more expensive cars with a higher price tag are more attractive to car thieves and more expensive to replace; they are also more expensive to repair after an accident.

• Your adress

If you live in a place with a higher crime rate, your premium will reflect the risk of theft. If your place has proportionally more car accidents and claims filed, this will also affect your premium.

• How you use your car

If you use your car for commuting to and from work or for business purposes, you will find yourself paying a higher premium than cars that only drive to the grocery store or for leisure.

• If you are a good driver

If you have never received a driver’s license or have never been in an accident, you will have a lower insurance rate than those with a less impeccable driving record.

• Your claim file

If you’ve made insurance claims before, especially if they’ve resulted in large payouts, your insurance premium will reflect that. But you can also get a rate increase if you have only made claims about accidents that are not your fault.

• How old you are

Young drivers, especially teenage boys, are grouped as riskier drivers because statistics say they exhibit poor driving habits and are involved in and cause far more serious accidents than older drivers. To a lesser extent, those sixty-five and older may see their insurance rates rise because of age issues that contribute to poorer reflexes, vision problems, and more.

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• Marital status

Studies show that husbands and wives are not involved in as many clashes as those who are not married.

• How your credit rates

While this may not seem fair to some, insurance companies may classify you as a moving risk because of your poor credit score.

Speaking with an expert specialist employed by an independent insurance firm will help you navigate the web of insurance policies, ensuring you get the most tailor-made insurance at the most competitive price.