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What Influences Your Car Insurance Cost?

— August 26, 2022

Why is my car insurance so high? The question is relevant for many people, yet many still have to search for the perfect answer.

Are you shopping for car insurance but bogged down by the expensive rates? Many car owners face this challenge. They feel more helpless on not finding any logical or proper reason behind this. If you are going through the same experience, don’t get troubled. You have to uncover the source that has driven up your insurance cost. There can be several factors playing into this. It would be best if you recognized them to eliminate them from affecting the auto insurance rate. Here are some instances to give you an idea.

Driver’s age

Younger drivers tend to be more expensive to insure because they’re more likely to get involved in accidents. On the other hand, older drivers are usually more experienced and, therefore, less of a risk. People under 25 will have to pay more because of the lack of driving experience and the higher risk of an accident. Some estimates suggest that people aged 16-24 may have to pay more than 130% higher rates for their policy than others falling in the age bracket of 25 to 75. Hence, if you wondered why the company asked you for a higher price, you know young age is an issue. 

Driving record

Why is my car insurance so high? The question is relevant for many people, yet many still have to search for the perfect answer. Anyway, driving history can be another factor to influence your premium. Insurance companies use your driving record to assess how risky you are as a driver. If you have a neat driving history, you will typically pay less for insurance than someone with multiple accidents or speeding tickets. Insurance companies also look at the type of vehicle you drive when determining your rates. If you drive a sports car, you can expect to pay more for insurance than someone who drives a sedan. Again, the reason here is self-explanatory.

Police officer leaning in window of car after accident; image by Matt Chesin, via
Image by Matt Chesin, via

For some more knowledge, a driver in a hit-and-run case can expect his insurance to cost at least USD90 extra a month. 

Missed payments

It becomes stressful if you’ve been late on a car payment. It doesn’t only affect the late fee, but your credit score could take a hit. You might not know that your car insurance premium could also be affected. Late payments can be visible on your credit record for up to seven years, and insurance companies often verify your credit health to help determine your premium. So, if you hope to keep your insurance rates low, stay up-to-date on your car payments.

Natural disasters

Natural disasters can also impact the price of car insurance. If a natural disaster occurs in an area where many people have their vehicles insured, the premiums will likely go up. It happens so because insurers will have to pay out more claims, and they will also have to deal with more customers trying to get their vehicles repaired or replaced. In some cases, insurers may even stop offering coverage in an area that is highly vulnerable to a natural calamity.

Like these, there are several other factors that you need to know to understand why your insurer asked you to pay a more premium rate.  

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