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11 factors that affect your car insurance rates

September 26, 2012 by Steven M. Gursten

I’d like to share an article today about factors that affect the price of your auto insurance.  The article highlights that while the amount of auto insurance coverage and whatever deductibles you have are still the two biggest factors affecting the cost of your insurance, there are many  other factors that come into play. Some of  these are factors are completely discriminatory, such as auto insurance companies using  your credit score as a factor in determining rates.

Below is a summary of the 11 factors that affect your car insurance rates.

Demographic factors affecting your auto insurance rates

1. Gender and age: Young men usually have higher rates than young women, as male teens statistically are involved in  more automobile accidents. But older men generally have better rates than older women, as auto insurance companies believe older women get in more automobile accidents, even though these tend to be more minor accidents.

2. Marital status: Insurance companies believe married people tend to have less accidents than single people, so getting married can lower your rate, depending on your driving history.

3. Your address: Insurance companies believe most car accidents occur close to home, so where you live can affect how much you pay. More populated neighborhoods might mean a higher car accident risk.

4. Credit scoring: Most insurance companies pull your credit score and use it to determine your rate. Usually lower scores equal higher insurance premiums.

5. Your line of work: Insurance companies can make correlations between accident risk and profession and will raise the premium for those career fields they believe have a higher likelihood of car accidents, such as truck drivers or salespeople.

6. Driving history: If you have had prior car accidents, traffic tickets or previous auto insurance claims, chances are, your rates will be higher.

7. Driving activity: Some insurance companies will change your rates based on what your car is used for, the distance you travel and where and when you drive. For instance, commuters might have higher rates than someone who doesn’t drive often.

Car-related factors affecting your auto insurance rates

8. Safety rating: If you have a car with a high safety rating, your insurance rate will likely be lower.

9. Vehicle size: Larger cars are thought to be safer than smaller vehicles, so larger cars with good safety ratings are likely to have lower premiums.

10. Your car’s age: The cost of repairing an older car after a crash can often be more than the car itself is worth. Newer cars generally have higher collision coverage rates than older cars because they’re less likely to be totaled due to the more expensive cost. This translates to a higher premium.

11. Likelihood of theft: A car that is on the top 10 most stolen cars list is more likely to have higher auto insurance rates.

Make sure you have this important coverage: UM and UIM

When trying to save money on your auto insurance premiums, please don’t try to save a few dollars and skip on the most valuable insurance coverage you can buy in Michigan –  uninsured and underinsured motorist coverage (UM/UIM).

This coverage provides a valuable source of legal recovery when someone is injured in a car accident by another driver who is uninsured or does not have adequate insurance.

Many people in this state don’t even know about uninsured and underinsured motorist coverage, because their auto insurance agents don’t tell them.  So they spend a lot of money to have a big insurance policy limit to protect someone they injure in a car accident, but they leave themselves and their families completely exposed to a horrific outcome.

Any auto insurance policy sold in Michigan today without UM and UIM is not enough to protect you and your family.

UM and UIM is also surprisingly inexpensive. For the price of a movie and popcorn, you can protect yourself and your family in case of a serious injury car accident with an uninsured driver or a driver with very low bodily injury policy limits.

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