Your driving history is one of the most important factors that determine your car insurance rates. Auto insurance companies examine your driving record for the past three to five years, depending on your state. If you have caused a car accident or received traffic tickets, you can expect to pay more for car insurance. Your gender, age, marital status, geographic location, and credit score all affect your insurance rates in different ways.
Fortunately, these imperfections tend to lose importance over time. So, if you have had a few crazy years with fines or accidents in the past, making an effort to drive more slowly and carefully to avoid future problems can pay off over time. Most fines and accidents without injury stop affecting your rate after three years, and accidents involving injuries usually don't affect your rate after five years. However, a DUI ticket can affect your premium for up to 10 years, and many companies don't insure someone who has it. You can reduce your costs by reducing your coverage, but this may mean that you'll take on a higher level of risk.
An auto insurance quote you get from one company could be significantly cheaper at another company for the same coverage. If you haven't checked competitive prices in a long time, you may be paying too much for your car insurance. Having gaps in your insurance coverage makes you look like a riskier driver, in part because insurance companies assume that you didn't stop driving while you were uninsured. The reduction in your rate will depend on your previous driving history; if you are a man who has never had an accident and has a clean driving record, you could see that your rates were cut by almost half. For more information, see WalletHub's guides on factors affecting car insurance rates and the cheapest cars to insure. A not-so-good credit history can cause your insurance rates to rise because companies view it as a major financial risk.
For example, buying exclusive liability insurance instead of full coverage can save you hundreds of dollars each year. In addition, if you can store your car in a safe place such as a garage, it is less likely to suffer damage, further reducing your likelihood. There are many factors that affect your car insurance rates, which means there are many ways to reduce your car insurance costs without skimping on coverage. Auto insurance companies use several pricing factors to determine your risk, namely the likelihood that you will file an auto insurance claim. Insurance companies don't publish the specific algorithms they use to calculate prices, which means that each insurer will offer a slightly different rate to the same driver. This is something that most people are familiar with because of the extraordinarily high insurance rates for teenage drivers.
Insurance companies use statistical models to identify which characteristics are most likely to generate greater claims and set their rates accordingly. Learn how to choose your car insurance deductible to identify the sweet spot between cost and risk. There are several factors that affect car insurance costs, some of which are under your control and others are not. Here are four ways that you can keep your auto insurance rates low:
- Maintain a Clean Driving Record: Avoiding traffic violations and accidents is one of the best ways to keep your auto insurance rates low.
- Shop Around for Competitive Rates: Don't settle for the first quote you get - shop around for competitive rates from different insurers.
- Choose Lower Coverage Levels: Reducing coverage levels can help lower your auto insurance costs without sacrificing protection.
- Improve Your Credit Score: A good credit score can help lower your auto insurance rates.