The cost of car insurance is personalized to each individual. The price you’ll pay for car insurance depends on a variety of different factors, like your age, location, and credit score. Additionally, certain life events can impact your car insurance rate. In this article, we’ll look at some of the life events that might cause your car insurance premium to increase or decrease.
What impacts car insurance rates?
When you apply for a car insurance policy, the insurance company uses a variety of rating factors to determine your unique premium.
Personal rating factors include things like:
- Your age
- Credit score
- Vehicle type
- Driving record
- Claim history
Policy-related factors include things like:
- Coverage limits
- Length of the policy term
Another factor that impacts the cost of car insurance is the insurance company that underwrites your policy. Each insurance company charges different rates for the same types and amounts of coverage. As a result, you might find that one company can offer you a much lower rate than a competitor for the same policy.
How car insurance companies determine your rates
Car insurance companies look at many different factors to determine your premium. These factors are used to gauge the amount of risk you bring to the company before it agrees to cover you.
For example, if you live in a location with a high risk of hurricanes, there’s a bigger chance that your vehicle will be damaged by flooding and you will file a claim. As a result, you will likely pay a higher rate for car insurance than a driver who lives in a lower-risk area.
Additionally, drivers who have been involved in multiple accidents or have gotten several speeding tickets are riskier to insure than drivers with a clean record. Therefore, if you have multiple violations, you can expect to pay a higher rate than a driver with a clean record.
To find the most affordable car insurance rate for your situation, it’s a good idea to get quotes from multiple car insurance companies. You can also take our short quiz to see how much you can expect to pay for car insurance at each of the top companies near you.