What Drives Auto Insurance Costs?

A major part of being a responsible car or truck owner is making sure you have an active auto insurance policy. Auto insurance rates are determined by several factors, and being aware of them can be useful when it comes to anticipating how much you will have to pay – and if you have enough in your working budget to accommodate it.

Since pricing (in the insurance industry) has much to do with risk assessment, there are some factors that come into play, such as the zip code you live in, which might be an area susceptible to hail, hurricanes, etc. The less desirable the factors, the more likely that your auto insurance rate will be comparatively higher than others, as there is heightened risk of damage or loss.

Age is also a factor, but unlike life insurance (where costs are typically cheaper if you are younger), auto insurance rates for younger car owners or drivers are generally more expensive, as statistics show higher likelihood of accidents in that age range (due mostly to lack of experience on the road). On the other end of the spectrum, aging-related issues, such as diminished reflexes and vision impairment, may also cause spikes in auto insurance rates.

Even your marital status can influence premium costing. Again, statistical data is the basis, with insurance companies seeing that married drivers with dependents are typically more careful on the road. However, if your driving record shows otherwise, that can still affect the pricing you will receive from the insurance company – especially when you apply for a policy renewal.

Being a responsible owner and driver in itself is weighed, too. As previously mentioned, insurance companies also look into driving records. Hence, you must do what you can to stay safe on the road, not only for you to secure a manageable insurance quote, but also to ensure you come home to the people you hold most dear – your family.

If we can answer any questions or help you select an auto policy right for you, call us at 817-423-004