Did your car insurance bill go up this year? Or maybe you’re one of the lucky ones whose bill actually decreased? Either way, it can be confusing when your car insurance premiums change from year to year and you don’t understand why— especially if you haven’t gotten a ticket or caused an accident!
So what can cause rates to change on a yearly basis? We’ve got a list of some of the ways that insurers can determine your rates.
1. Where do you live? Location, Location, Location. This can have a huge impact on your car insurance premiums. Typically your rate will be higher if you live in an urban area (busier streets are more accident-prone. Towns and areas that are less congested tend to have a lesser effect on rates due to lower risk.
2. How much coverage do you need? The amount of coverage is based off your needs as well as the value, age, and type of car you’re driving. Overall, the more coverage you choose to carry, the higher the premium will be.
3. How long have you had your license? An inexperienced operator can be anyone who has had their license for less than 3 years. Experienced operators— individuals who have held their license for 6 years or more, typically file fewer claims than new drivers. For this reason, new drivers will carry a higher premium until they are more experienced.
4. What do you drive? The type of vehicle also plays a key factor. A sports car known for speed will be more expensive than the family van. In the same sense the more expensive the car, the higher the premium.
5. How much will you be driving? Often if you’ve owned your vehicle for a year or more and don’t drive regularly, insurance companies may give you a discount for having low annual mileage.
6. Do you have a bad record? This one tends to be a no-brainer. People who have a history of car accidents or traffic infractions will likely have to pay more than people who have been problem-free for many years. Similarly, if you’ve filed a lot of claims in the past, this can mean you’ll have higher rates.
7. What’s your insurance history like? Your prior insurance history can affect your rates today! Insurers don’t like to see gaps in coverage, so inconsistencies might mean you’ll be paying more in the long run. Staying consistently covered shows responsibility and opens doors for lower rates.
8. Who’s on the policy? Lastly, the insurance company won’t just be looking at all of these factors for you (the vehicle owner), but for any other drivers you want listed on your car insurance policy.
At CHI Insurance Agency, whether you’re getting your first car, that new car you’ve always wanted, or taking that big step and adding your newly licensed child to your policy, we’re happy to help walk you through any changes to your policy from year to year. We don’t just look for the best possible rate—we’ll help you understand your coverage needs as well as your rate, and discuss other factors that may help lower your rate. If you have questions or want a free estimate, give us a call today.