Why do different drivers pay different insurance rates? It concerns the risk drivers pose to the insurer based on their driving record and other factors. In other words, you're in control, to a degree, of what you pay for car insurance. Understanding why car insurance rates differ from driver to driver is important to make informed decisions when purchasing coverage. In most cases, it is higher for high-risk drivers.
A high-risk driver to an insurance company has been in multiple accidents and has racked up numerous traffic violations. Insurance companies don't want customers who are constantly filing claims. Getting cited for drunk drinking is another red flag to the insurer that the driver engages in a risky lifestyle.
Statistics show that the highest car insurance rates are typically for teens between 16 and 19 due to a lack of driving experience. Vehicle type can also drive up insurance rates if it's a sports car or a new expensive model.
When calculating your premium, the insurer also considers your credit score and ability to pay insurance bills on time. A poor credit score suggests to the insurer that you could be more reliable as a customer who pays on time. Some states, however, such as California and Massachusetts, don't allow credit scores to affect insurance rates.
Shopping around is an excellent way to save money on car insurance if you are viewed as a high-risk driver. Even though many insurance companies frown upon high-risk drivers, some firms are more open to cost breaks for such drivers. But what works for some drivers might not work for others, so you must approach auto insurance to customize a policy to your needs.
By enrolling in a state-approved driver safety course, you can show your insurer you're taking steps to lower risks. Most of these courses are only six to eight hours long. Several states require insurers to promote discounts for drivers who complete accredited driver safety and education courses.
Another way to beat rising auto insurance costs is to select a policy based on how often you drive. If you don't drive much, you don't need to pay as much for insurance as someone who commutes to work every day. Your insurer can install a tracking device on your vehicle to measure usage and how safely you drive.
Taking a driver's education class can help lower insurance rates for younger drivers. However, if you are over 25, it's likely to result in a discount if being labeled a high-risk driver is due to your age. Completing a driver's education course can improve driving skills and knowledge regardless of age.
Minimizing your coverage for car insurance means reducing your policy's coverage by choosing the minimum required insurance level by the state, dropping optional coverage, or selecting a higher deductible to lower premiums. High-risk drivers can save money on premiums with this method, but it's crucial to consider the risks of insufficient coverage in case of an accident or unforeseen event. It's important to weigh the cost savings against the potential risks before minimizing your coverage.
Swapping to a cheaper-to-insure car can help lower your insurance premiums if your current vehicle is causing high rates. High-risk drivers with speeding tickets can opt for a standard model instead of a sports car to lower premiums, even with a clean driving record. Theft rates may also influence the cost of comprehensive insurance, so purchasing a car less likely to be stolen can help reduce rates.
There are several ways to save money on car insurance, even if it means getting a different vehicle or reducing coverage. Contact our team at Riverbend Insurance to discuss your personal auto insurance needs, and we'll help you customize your policy.
