Insurance is a tricky, nuanced game comprised of many details, hypothetical scenarios, and the probabilities of those scenarios playing out.
So, as you compare car insurance quotes in your quest for the best deal, you will find that you have to enter some information about yourself and your situation. You may not realize it since nearly everything these days involves giving away personal information, but the details you give to a potential insurer goes a long way in affecting your overall car insurance premium rates.
Demographics and your insurance rates
As noted above, car insurance providers use a combination of several demographic factors to determine what your insurance premiums ought to be. These factors include age, marital status, gender, credit score and geographical location, among many others.
For example, the Consumer Federation of America analyzed insurance premium rates from major insurance providers and found that a woman with a college degree, owning a home and a professional career would spend 68 percent less on car insurance than a single woman with a high school diploma who was renting a home in a middle-income area.
While you can’t control many of these factors, it helps to understand how they affect your insurance rates and what you can do to lower your expenses.
Gender | Gender plays a major role in determining your insurance premium rates. Men have been shown to pay much more than women when it comes to car insurance. A recent article published by CBS News showed that men pay over $15,000 more than women for their car insurance over their lifetimes.
The higher rate for men is attributed to the fact that insurance companies consider men to be of higher risk to insure than women. This is because more men are involved in accidents than women.
Age | According to statistics from the Insurance Institute for Highway Safety and the Highway loss Data Institute, fatalities for car accidents are three times higher for drivers aged 16 – 17 than those aged 20 and over. Younger drivers are therefore considered a higher risk to insure.
Young drivers aged between 16 and 25 are charged high insurance rates. Drivers often experience lower insurance rates when they reach the age of 26 unless they have a poor driving record.
Marital status | Your marital status is just as important in determining your car insurance premium as your age and gender. Single people pay more for auto insurance than married people. Married people are considered safer drivers. They are known to take greater care while driving and are considered more responsible.
Where you live | Where you live reflects on your premiums too. If you live in a neighborhood with more cars, then accidents are likelier to happen and your insurance rates will be higher. You can also expect higher insurance rates if you live in a neighborhood with high accident rates, collision injuries and theft.
Profession | Insurance providers also consider your profession in terms of risk. Professions that require you to drive most of the time put you at greater risk of being involved in an accident. If you’re a journalist, delivery driver or sales person, you can expect your insurance rates to be higher.
How to reduce your rates
Look for discounts | Look for discounts from your current insurance provider or a different insurance provider. A clean driving record and staying with your insurance provider may get you a discount.
Avoid filing for small claims | Don’t give into the temptation of using your insurance to cover the cost of everyday repairs. If you make a claim as small as $2,000, you could cause an increase in your insurance premiums by more than 40 percent.
Compare rates | Make it a point to compare car insurance quotes every year before renewing your policy. This will ensure that you get the best possible deal.
Take the time to consider your personal profile and determine what you can change to lower your expenses on insurance. Simple changes can go a long way in helping to reduce your insurance rates.