What Affects Car Insurance Pricing

Being familiar with the factors that affect car insurance pricing can help you get the best auto insurance premiums. Car insurance companies charge monthly premiums, and this costs covers damage. Paying a high premium may impact your personal finances. Understand the factors that influence pricing, and then take steps to lower your out-of-pocket expense.

Driving Record

A bad driving record indicated by a several speeding tickets or other traffic violations can increase your monthly and yearly insurance premiums. On the other hand, drivers with a good driving record typically pay less for auto insurance. Pay attention to speed limits and exercise extra care when driving to avoid accidents and tickets. Drivers with several traffic violations may consider taking a driving improvement course to add positive points to their driving record and perhaps qualify for a lower insurance premium.

Low Deductible

Auto insurance deductibles refer to your out-of-pocket expense before the insurance takes effect. For example, if you agreed to a $200 deductible, you will need to pay $200 after an auto accident, and your insurance provider will cover the remaining balance to repair your car. Choosing a low auto deductible reduces the amount you will need to spend out-of-pocket. Unfortunately, low deductibles trigger higher insurance prices. Increase your deductible to save money on insurance.

Credit Factors

Insurance companies tend to reward customers with a good credit rating by offering them cheaper insurance. Take steps to fix your credit before renewing your auto insurance policy. Pay your bills on time and get rid of consumer debt to help you qualify for a better premium. Insurance companies reduce premiums because a good credit history signals a measure of responsibility

Type of Coverage

The more coverage you have on a car, the higher the insurance price. If driving an older car, consider dropping collision or comprehensive coverage to save on the monthly cost. Refer to Kelley Blue Book to learn how much you car is worth. Take your insurance premium and divide this number by 10. If your vehicle is worth less than this figure, you can likely drop the coverage and reduce your insurance price.