The average annual cost of auto insurance in the U.S. is about $ 1,674, but that can vary considerably due to the many aspects that may affect the price of a policy. Said factors are considered based on how likely the policy owner is to have an accident. In fact, these types of evaluations are used because they can be useful to predict the frequency accidents. However, not all insurance companies use the same predictors, and some may use other indicators from the list below.
- You’re older
When it comes to analyzing car insurance rates for young people, insurance companies normally take into account the applicant´s experience behind the wheel, in addition to their particular potentiality of being involved in a car accident. In general, risk is an element that greatly penalizes novice drivers, to the point that insurance companies offer notably high prices for most vehicle insurance policies for drivers with less than 25 years of age. This difference in rates grows with age, meaning the older someone gets, the cheaper the policies will be for them.
- You got married
Although marital status is not decisive, a person who is married and has children usually represents fewer risks than single people do, particularly for insurance companies. It is estimated that individuals that drive with their families as passengers, will be more prudent than anyone who commutes or travels alone and has fewer responsibilities. Moreover, couples have a greater chance of sharing driving duties than people who are single. As a result, couples might file fewer claims per capita than those who are not married. An added bonus if you are married is a greater chance of qualifying for multi-vehicle/drive discounts, which could reduce premiums significantly.
- You got a degree
Most auto insurance companies take into account the level of education of a driver because they consider that individuals with higher education will have a lower tendency to engage in dangerous behaviors. In addition, people with degrees often have larger incomes, allowing them to pay more elevated deductibles in case they are involved in an incident, which can also lower their premiums. For auto insurance companies, a driver´s educational level can be a factor in determining their rates. In fact, some car insurers have reported that the most expensive primes are paid by high school dropouts, representing hundreds or even thousands more than college what graduates pay.
- You moved
In the event that you move from a city to a country region, the danger of harm or burglary reduces so your premium will decrease. Rural areas have less traffic and crime so the odds of you making a claim because of an accident, robbery, or damage are lower than in major cities. Where you store your vehicle overnight also influences your rate. If now you park your car in a garage after moving when you used to leave it in the street, your rate might be reduced on the grounds that your vehicle is now sheltered from climate, individuals, and traffic.
- You changed vehicles
While buying an SUV might be notably more expensive than getting a sedan that is not always the case when comparing insurance policies between for both types of car. SUVs are usually less expensive per year to insure than sedans. Nevertheless, it is advisable to consider your options before trading your vehicle since prices will ultimately depend on the model, safety features, whether the car is used or not, and the insurer´s parameters. Getting estimates directly from insurance companies can be time consuming, inefficient and/or expensive, so searching for quotes online is an excellent way to save not only time but money.
- Your employment circumstances changed
The bigger the risk a driver represents for an insurance company, the higher their premium will be to compensate the fact that applicant in particular has a greater chance of filing claims. If your vehicle usage has turned from the category of “commute” to a “pleasure” classification due to unemployment, that means you could actually save some of money from your car insurance rate. The same goes for those who decide to stop working in an office to start doing it from home. If you don’t drive as much to work as you used to, the diminished annual mileage on your vehicle could lead to lower premiums since reduced road time equates to a lesser likelihood of accidents.
- You bought a home
According to a report made by the Consumer Federation of America (CFA), people who own a house or an apartment usually pay quite lower premiums for auto insurance. Their study showed that people who rent a place to live pay as much 47% more than homeowners to insure their cars. Another way for people who own some type of property to save money when it comes to car insurance is to bundle it with their home insurance. Bundling insurance refers to buying two or more policies from the same insurer to get a discount. Homeowners can obtain between 5% and 25% off on car insurance, which is one of the best discount ranges in the market, as indicated by Forbes.com.