Shopping for car insurance can be a bewildering process. Why is one company’s quote higher than its competitor? Your auto insurance rate is determined by a number of factors, some of which are in your control and some of which are not. Understanding how rates are set and how you can impact them can help demystify the process.
One of the biggest factors that determines the cost of your annual policy is your past driving record. If you have had a number of moving violations in recent years you will find it virtually impossible to find really cheap car insurance. Carriers look at your past driving habits as an indication of how big a risk you are. The bigger the perceived risk, the more you will pay.
Another tool insurers use is your credit score. While it might seem unfair that your credit score should be used to determine your auto insurance policy, many insurers use this as another indication of your risk level. Individuals with good credit records also tend to be safer drivers, thereby lowering their rates.
While it may be out of your control, where you live also is a big factor is determining the rate you pay. If you live in an urban area like New York City, your insurance rates will be sky-high, thanks to the population density and traffic congestion that leads to more accidents. In contrast, people living in rural areas can often find a better deal. That’s why Central Virginia auto insurance can be among the lowest cost policies around. Fewer cars on the road means fewer accidents and lower claim expenses.
The kind of car you drive is also a big factor in how expensive your policy will be. Not surprisingly, a compact car with the latest safety features will cost less to insure than an oversized, expensive SUV. New cars can be less expensive to insure than older ones, especially if you have the latest anti-theft devices installed. It’s a good idea to get a rate quote before you buy a car so you can avoid insurance sticker shock once you drive the vehicle off the lot.
If you are in a low risk profession like a teacher or scientist you will often find that your car insurance costs will be lower. Carriers often provide discounts based on your job or a professional organization you may be associated with, so be sure to ask when shopping around for rates.
Regardless of your driving record, credit score or other factors, it’s always a good idea to take the time to compare rates from multiple insurers. With dozens of insurance companies doing business in virtually every state, getting quotes from even three or four is still only scratching the surface. Take advantage of the many online tools available to quickly and easily get quotes from as many carriers as possible. Understanding how your rate is determined and comparison shopping for the best one will place you squarely on the road to saving money and making sure that you can have even better than average auto insurance rates!