Ever been in a situation in which you ask yourself, “Why is my car insurance so high?” Don’t worry, since today we’ll show you the five main factors insurance companies consider when giving insurance premiums.
Why Is My Car Insurance So High? 5 Things to Keep in Mind
If you own a car, then you need to pay a monthly insurance fee, no matter if it’s a full coverage policy or liability coverage insurance. Of course, it’s normal to expect that these fees tend to rise over time due to inflation. However, there comes a time that you might notice that insurance costs are becoming much higher than what you expect.
That’s why every car owner must know the main things that can make them pay more for car insurance rates.
I don’t know why is my car insurance so high! Here are five factors that mean higher premiums:
- Bad driving records or driving history
- ZIP Codes
- The type of car you drive
- Poor credit history or credit scores
- Any previous insurance history or insurance gaps
Bad Driving Records or Driving History
First, we have driving records.
Since the first day you got your license, you also got yourself a driving record. In this record, there’s everything you can think of when it comes to driving, from general information such as mailing addresses to any public records that relate to you as a driver. These public records include license suspensions, accidents, traffic violations, tickets, and more.
Because of this, it’s only natural to expect insurance companies to take into consideration driving records. After all, a bad driving record usually means that the driver has higher risks while being on the road. In other words, his or her chances of being involved in an accident are much higher compared to a good driver with a clean driving record.
For this reason, insurance companies tend to charge higher rates to drivers with lots of marks in their driving records. Luckily, just like insurance premiums can increase with a bad driving record, they can also lower with a good record. In fact, some companies even offer discounts when having a clean driving history.
Moreover, you must know some infractions can stay on your record permanently or just for a brief period of time.
For instance, small infractions such as speeding typically stay on your record for a couple of years. On the other hand, violations such as driving under influence (DUI) can remain on your record for ten years or even more.
Do you, by any chance, live in an unsafe neighborhood?
If you do, then it’s very likely that you’ll get higher premiums. That’s why, along with a bad driving record, another factor that can make care insurance so high is your location.
Areas in which car accidents are a common thing tend to have higher auto insurance rates. Additionally, neighborhoods with a high crime rate also tend to be affected by high premiums as well.
If you got in mind moving away by any chance, then you can never go wrong by choosing a rural area, since they have lower risks when it comes to car accidents. Additionally, you’ll also want to move to a safe neighborhood.
The Type of Car You Drive
When making yourself the question of “why is my car insurance so high”, you’ll want to consider your type of vehicle.
Your car might be among the top things insurance companies take into consideration when giving rates. Although the specific car brand doesn’t matter here, what it really matters is the type of vehicle you own.
With that being said, it’s common to expect lower rates if you own an SUV. On the contrary, more expensive and luxurious cars tend to bring higher costs. In the end, repairing and getting replacement parts is much simpler with an SUV rather than an expensive car.
Poor Credit History or Credit Scores
Wondering if your credit score affects insurance premiums?
Well, it does in some cases. In fact, a credit score can even play a significant role when it comes to insurance rates. Low credit scores help insurance companies know the chances of a person to file a claim.
The higher the probabilities of filing a claim, the more likely the person is often at risk when driving. Moreover, in most cases, people with a good credit score tend to pay their bills on time compared to those with a bad score.
Luckily, there are a few things you can do to improve your score. Some of these actions include making your payments on time, having a long and clean credit history length, and having little to no total debt.
Moreover, there are certain things that you’ll want to stay away from as well if you don’t want to hurt your credit score. For instance, you’ll want to avoid opening many accounts too fast, having a high debt, and delaying payments.
Any Previous Insurance History or Insurance Gaps
Lastly, when wondering why your car insurance is so high, you’ll want to keep in mind your previous insurance history.
Being without insurance for a period of time can make you get higher premiums. In other words, insurance companies prefer drivers that count on a long, continuous insurance history.
In case you don’t count on a car at the moment, then we suggest talking to your insurance company. They will know what will be the best option for you.
Moreover, just like insurance companies grant higher rates to clients with insurance gaps, they also tend to give higher rates to new clients as well. But keep in mind that this may be a temporary measure until you’ve become a long-time client.
Of course, these are just several factors that affect insurance rates. So, whenever you ask yourself the question of “why is my car insurance so high”, you can now have a better idea of the main reasons. Not only that, but you’ll also know which are the main things you can do to lower car insurance premiums!