I enjoyed writing several blog posts in April that were based on a presentation I gave to a group on frequently asked home insurance questions. I though it would be apropos, to take the same approach with car insurance and address a similar question set beginning with what factors impact your rate but have little or nothing to do with your car! Some of them are the same as the initial set I mentioned on home insurance which isn’t a surprise!
Credit: Most car insurance companies in most states utilize a person’s credit score, the insurance industry refers to it as an “insurance” score, to help determine the rate you pay for your policy. This is usually one of the top rating factors, depending on the insurance company. People with good credit pay less for their car insurance than people with poor credit scores. If you want to pay less for your insurance, then improve your score.
Marital Status: Married people typically pay less for car insurance than their non-married counterparts. Provided of course, both individuals have similar good driving records and credit scores.
Occupation: What you do for a living will probably impact what you pay for car insurance. White collar workers usually pay less for their insurance than blue collar workers and some companies provide discounts for people in certain occupations such as teachers, members of the armed forces, policemen, firefighters, or retired individuals.
Education: Many car insurance companies provide discounts for individuals with a higher education. College graduates, as such, pay less than people with only a high school education and individuals with a master’s degree or doctorate pay less than individuals with a bachelor’s degree.
Home Type & Location: Where you live also impacts your car insurance rate. If you live in a smaller city or town than say Dallas, Fort Worth, Houston, Austin, or San Antonio, then you’ll pay less for your car insurance than residents in those cities. The reason is more people equals more cars, which means a greater likelihood of being involved in an accident than if you live in Waco, Tyler, or Amarillo.
The type of home you live in will also impact your rate. People who live in apartments pay more for car insurance than people who rent a condo or single-family home, and people who own homes pay even less.
Driving Record: It should not be a surprise that people with no claims or tickets pay less for car insurance than people who’ve been involved in an accident, had a comprehensive claim, or been ticketed for speeding, failure to stop, or any other moving violation.
Age: The two age groups who pay the most for car insurance are teens and people 70 or older. The reason is both groups are more likely to be involved in an accident than someone in their 30’s, 40’s, or 50’s. In addition, most car insurance companies don’t rate driver’s as an adult until they turn 25, or if they are younger and married.
Driver Type: What kind of a driver are you? People who don’t commute are considered pleasure drivers and they pay less than commuters. People with a short commute pay less than those with a long commute, and people who drive for work, meaning they drive to outside appointments 2 or more times a week, pay more than even commuters
What do you think about these “risk” factors? Share your comments, questions, and experiences with me on my Facebook, Google +, or LinkedIn pages. I’d love to hear from you!
