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What Exactly Affects How Much You Pay for Car Insurance?

July 4, 2024

When it comes to the cost of car insurance, there are numerous variables that can impact the amount you pay. Those factors can also differ from state to state, as well as from one insurance company to the next. This is why it’s important to shop around and know what is covered before you commit to a particular plan or business.

If possible, you should find a trusted local insurance company such as Bosworth & Associates Insurance in Tyler, Texas. Local insurance agencies vs. large corporate entities often provide a more personalized experience, as well as more accountability in their interactions. In order for any business to succeed in a small town, accountability is critical.

When it comes to purchasing insurance, it’s convenient and can save you money on your insurance premiums when you bundle your insurance. Whether you need renter’s insurance, a homeowner’s policy, medical insurance, or other types of insurance, you can bundle it with your car insurance and generally get a smaller premium.

Here’s a list of other factors that affect your car or truck insurance:

How’s your driving record?

One of the top factors that will affect your car insurance is your previous driving history. Whether it’s traffic write-ups or accidents, your driving record will follow you, and your insurance agent will have access to it when you apply for car insurance. How far back the violations are looked at depends on your state, but the general timeframe is 3-5 years.

If your driving history is really bad, it might be difficult for you to find car insurance, or you might find yourself paying a higher amount. If this is an issue for you, at least you can start working on improving your driving record and know that, in time, your premiums will get lower.

Do you have good credit?

Having good credit, in most states, means you can get lower car insurance premiums. There are reasons for responsibility here, as well as financial reasons. Insurance companies correlate a good credit score to a good driving record and factor it into the possible risks associated with insuring someone with a low vs. high credit score.

What are the specs on your vehicle?

Your insurance premium is impacted by the age of your car or truck, the model, and the make. Because newer vehicles typically come with more additions that are expensive to replace, complete with the latest technology, they’re more costly to insure.

When it comes to the type of vehicle, a family vehicle carries less statistical risk than a speedy sports car.

What’s the age of the person being insured?

Studies have shown that a person’s age makes a considerable difference when it comes to the risk factor of drivers. Drivers under 25 and those over 75 statistically have higher accident rates, therefore carrying a higher risk of insuring. Teenage drivers, in particular, carry a lot of risk factors when it comes to driving and are traditionally the most expensive to provide car insurance for.

State and City

The location of your home, as well as where the car or truck is parked, impacts your insurance rates. There are multiple reasons for this:

  • Weather: Many parts of the US experience extreme weather likely to cause damage to their vehicle, such as wildfires, hurricanes, tornadoes, floods, etc. The higher risk of weather-related damage means your rates could be higher.
  • Traffic: If you live in an urban area vs. a rural one, you’re driving in heavier traffic and, therefore, more likely to get in an accident. In addition, there’s a higher likelihood of your vehicle getting broken into or damaged in some way. Living in a city or densely populated place with heavy traffic could mean you pay more for your car insurance.
  • Gender and Marital Status: Although this isn’t the case for all states, gender and marital status may impact how much you pay for car insurance. Women of middle age and unmarried people often pay higher rates.

 

While the above factors may contribute to you paying more for your insurance, there are also things that can help lower your deductible. Many insurers offer discounts for certain reasons, such as the multi-policy discount mentioned at the beginning, as well as military history, good driver record, college graduate, homeowner, and more.

 

While there are some factors you can’t help when it comes to the impact they have on your car insurance rates, there are many things you can do to make sure you’re paying a reasonable amount for your insurance: keep a good driving record and credit score, drive a vehicle that doesn’t carry a great deal of statistical risk to drive, and find yourself a trusted local insurance agency to work with.

Bosworth & Associates has been selected for the 19th year as a Best Practices agency.

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