Fac­tors that can af­fect pre­mi­ums for auto in­sur­ance

Daily Local News (West Chester, PA) - - AUTOMOTIVE - By Metro Cre­ative Ser­vices

Auto in­sur­ance is a ne­ces­sity for driv­ers in many lo­cal­i­ties. But while lo­cal laws may man­date driv­ers have in­sur­ance, no such laws man­date how much driv­ers must pay to in­sure their ve­hi­cles. Cer­tain fac­tors can in­flu­ence just how much driv­ers will pay for their auto in­sur­ance poli­cies.

1. Com­pla­cency: Do­ing noth­ing at all may find you spend­ing too much on auto in­sur­ance. Many driv­ers fail to rou­tinely shop around for cov­er­age, and that can be cost­ing them money. In its 2013 In­sur­ance Shop­ping Study, the re­search firm J.D. Power found that only 23 per­cent of auto in­sur­ance cus­tomers shopped their poli­cies in the past 12 months. Shop­ping around for a bet­ter rate can save driv­ers con­sid­er­able amounts of money, and the In­ter­net has made com­par­i­son shop­ping eas­ier than ever be­fore.

2. Cov­er­age and de­ductibles: The type of cov­er­age you choose, as well as the amount of your de­ductible, will af­fect the cost of your pol­icy. Choos­ing a higher de­ductible (the amount you pay out of pocket be­fore in­sur­ance will start to pay) usu­ally leads to a lower monthly pay­ment. Full cov­er­age may not be nec­es­sary if you own your car or the car is old and not worth that much.

3. Lo­ca­tion: Where you live can af­fect the cost of your in­sur­ance pre­mi­ums. Since most traf­fic ac­ci­dents oc­cur close to home, the area where you live fac­tors heav­ily in the cost of your pol­icy. Densely pop­u­lated neigh­bor­hoods with more cars mean you could be at a higher risk of ac­ci­dent, theft and in­jury. Plus, costs for re­pairs may be higher in these ar­eas. Mov­ing to a less pop­u­lated area can re­duce in­sur­ance costs.

4. Age/gen­der: A per­son can­not change his or her age, but it’s wise to re­al­ize that age and gen­der can af­fect costs. Young men typ­i­cally in­cur higher rates than young women. Un­der­stand­ing your po­ten­tial in­sur­ance costs can help you when choos­ing a ve­hi­cle.

5. Ve­hi­cle type: Ac­cord­ing to State Farm, some in­sur­ance com­pa­nies in­crease pre­mi­ums for cars deemed more likely to be dam­aged or stolen. A ve­hi­cle that scores high in in­de­pen­dent safety rat­ings may be cheaper to in­sure than ve­hi­cles that scored low on safety tests.

6. Credit score: Raise your credit score and you may be able to lower your car in­sur­ance costs. Ac­cord­ing to the re­search firm Con­ning & Co., roughly 92 per­cent of in­sur­ers use your credit in­for­ma­tion as a fac­tor to de­ter­mine rates. Stud­ies show that peo­ple with bad credit tend to file more and higher claims.

7. Mar­i­tal sta­tus: Statis­tics show that peo­ple who have tied the knot are in­volved in fewer ac­ci­dents and given fewer tick­ets than peo­ple who are sin­gle. Get­ting mar­ried can re­duce in­sur­ance pre­mi­ums, as can com­bin­ing or bundling poli­cies with your spouse.

8. Driv­ing his­tory: A driv­ing his­tory full of ac­ci­dents and tick­ets can af­fect your in­sur­ance rates. How­ever, many tick­ets and ac­ci­dents that do not in­volve in­juries stop af­fect­ing in­sur­ance rates af­ter three years. Driv­ing safely and bid­ing your time un­til your tick­ets and ac­ci­dents no longer in­flu­ence your rates can save you money.

Driv­ers have con­trol over how much they spend on auto in­sur­ance. Safe driv­ing habits, the right choice of ve­hi­cle and where driv­ers choose to live can in­flu­ence the cost of their auto in­sur­ance poli­cies.

Young men typ­i­cally in­cur higher rates than young women.

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