Have you ever wondered why insurance rates differ from one insurance company to the next? The answer is – each insurance company has its own set of rules that place different weight on each element they consider. Some companies may give a lot of weight to one’s driving history while another company doesn’t. Another company may not penalize someone for their first moving violation, while others do. Although each insurance company works independently, certain factors are consistent across the board. Read on to find out what factors are being considered:
Your Driving History
This is probably the factor that people understand best. If you have a bad driving record, you are going to pay more for your insurance. If you have had DUI, any at-fault accidents, or a lot of tickets, you will find higher insurance rates and possible trouble finding insurance at all.
Your Claims History
This is another factor that most people understand. If you have had a lot of claims in the past, there is a good chance you are going to have more in the future. For that reason, many people avoid filing a small insurance claim, knowing that it can help prevent their rates from going up. If you are in a serious accident, of course you should file a claim, but if it is a minor dent or scratch, and you carry a higher deductible, you may want to consider living with the dent or scratch, or paying for the repair yourself.
Another important consideration is that insurance companies aren’t as worried about the amount of your claims, but the number of claims you have had and how frequent they have been.
The vehicle you drive is also a factor in the cost of your car insurance. Insurance companies consider things such as:
- The cost to repair a particular model. With more technology, comes a higher cost to repair a vehicle, and the cost to insure them. For instance, a Tesla Model X panoramic windshield replacement can cost upwards of $2300, while an average windshield costs about $250.
- Safety features are also a consideration. If you have a larger vehicle with a good safety rating, it will likely cost less to insure than a smaller care with a poor safety rating.
- The age of your vehicle also affects the cost of insurance. If you have a new vehicle and it is totaled in a car accident, the cost to replace it will be substantially more than if you totaled a 7-year old vehicle.
Insurance companies take into account car accident reports based on zip code to define what they call is a rating territory. If you live in an area where there is a lot of traffic and possibly poor driving conditions, your insurance premium will likely be more than if you were to insure the same car in a different location.
Your age and gender affect car insurance rates, as you might expect. Young men are often classified as the most dangerous, and the older one becomes, they are statistically a better insurance risk. The average cost to insure a 16-year old male in Wisconsin is $6703, while a 65-year old man only pays $1,058 on average.
Your Marital status
Married couples get to enjoy lower premiums from insurance companies. They get discounts for having a family policy, and insurance companies love individuals who have a sense of responsibility.
Your Credit Score
Finally, your credit score is one of the major factors most insurance companies consider. While many people don’t understand why one’s credit score is a predictive factor, statistics do show that the higher one’s credit score, the better a risk they are. Your credit score something that has been considered for many years and won’t be going away anytime soon. Your car insurance premium is just another reason to work on improving your credit score.
The team at Strobel Insurance is ready and able to help you find affordable premiums. Servicing the residents of Eau Claire and the surrounding areas. Being an independent insurance agency, we can compare the rates of many companies to ensure you are receiving the best possible value. For more information, give us a call at Strobel Insurance today!