Common causes of overpriced insurance rates include your age, driving history, credit history, coverage options, what car you drive, and where you live. Anything that insurers can link to a greater chance of you having an accident and filing a claim will result in higher car insurance premiums. Car insurance companies increase rates for a number of reasons. Your premium could increase if you have a car accident, file a claim, increase the limits of your coverage, or lower your deductible.
Changes in your credit rating can also result in higher rates. Our insurance team is comprised of agents, data analysts and customers like you. They focus on the points that consumers are most concerned about: price, customer service, policy features and savings opportunities so you can be sure which provider is right for you. The amount of insurance you have can have a significant impact on your rate, and not just when you compare an exclusive liability policy with full coverage.
Each state has its minimum coverage requirements, which vary greatly from state to state. Depending on the minimum insurance requirements in your state, you may pay more for a minimum coverage policy than for someone else in another state. Compared to California, New York requires more coverage and higher limits. If you ignored all other qualifying factors, hypothetically speaking, a New York policy could be higher than a California policy based solely on the state's minimum coverage requirements.
In addition, if you're financing your vehicle, your mortgage lender will likely require you to have comprehensive and collision coverage, also known as full coverage. Many of the best auto insurance companies also offer optional and complementary coverages, such as rent reimbursement, emergency road service, and coverage insurance. Generally speaking, the more coverage you choose, the higher your premium. However, balancing price with protection is critical; buying a poor policy to save money can cost you thousands (or more) in the long run if you're at fault for an accident.
Instead of reducing or eliminating the coverage you need, you may want to review your policy to see other savings opportunities, such as discounts. When insurers consider you a higher-risk driver, you typically face higher insurance premiums. Age is an important factor in determining risk, because statistics on teen drivers show that new teen drivers are more likely to have an accident due to lack of experience. In fact, an 18-year-old driver with his own policy pays more than twice as much per year for full coverage compared to a 25-year-old driver.
Older drivers, especially older drivers, are also at greater risk of having an accident and generally face higher rates. It's important to note that some states don't allow auto insurance companies to use age as a qualifying factor, such as Hawaii and Massachusetts. In these two states, a 25-year-old driver and a 50-year-old driver must pay the same or similar rates if all other factors are identical. Since moving to another state may not be a viable savings option and you can't do anything about your age, consider the other factors that influence determining your car insurance premium.
There are several ways you can lower your car insurance, such as improving your credit score (when allowed), being a good driver, and seeking discounts. In addition, you can compare prices at different insurance companies to see which company will offer you the best rate. If you're looking for a new car, you can also request a quote for a couple of different vehicles to see which one could result in the cheapest premium. Because each provider calculates premiums differently, many insurance professionals recommend that you look for the best quote, even if you have lower than average credit or a low credit history.
Because there is no standard car insurance rate that all companies use, some companies may offer more affordable prices than your current provider. If you research other auto insurance companies in your area and request a quote, you'll better understand how your current rate compares with that of the market. If you find a company that offers a cheaper premium for the same level of coverage, it may be worth switching companies if other aspects of the new company also match what you want from the company. The only states that don't allow credit-based rates on car insurance are California, Hawaii, Maryland, Massachusetts and Michigan.
The amount you'll pay for car insurance is affected by a number of very different factors, from the type of coverage you have to your driving record and where you park your car. Used cars are generally cheaper to insure than new or sports cars because they have less value and are less expensive to repair. Taking steps to improve your credit rating can simultaneously improve your insurance premium, depending on your location, your insurance company, and the dramatic improvement in your rating. Since car insurance companies charge different rates for coverage, it's a good idea to compare prices and quotes from several insurers.
Women are generally less likely to have accidents, including serious accidents, so they tend to pay lower car insurance rates than men. The main reason younger drivers pay high rates for car insurance is that they have a recent license and a high accident rate. If you've ever insured multiple vehicles, you probably know that the make and model of a car can have a major effect on the cost of insurance. The best way to find the cheapest rate is to search for different auto insurance providers in your location and request a quote.
And if you're a car owner, the law requires you to have an auto insurance policy that provides you with financial protection in case you're involved in an unexpected accident or if your car is damaged or stolen. The car insurance company you purchase insurance with is a key determinant of the cost you'll pay. Some auto insurance companies even offer mileage-based insurance policies, also called pay-per-mile insurance, that can help infrequent drivers get cheaper car insurance. When you file a claim for comprehensive or collision insurance, you typically pay a deductible before the insurance covers the rest of the costs.
California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania prohibit auto insurers from using gender as a qualifying factor. .