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Factors Affecting Your Auto Insurance Rates

Posted on: October 1st, 2011 by Traffic School

For most of us, understanding how and why our auto insurance rates are what they are is extremely complex and difficult. It sometimes may seem like everyone you know pays less than you even though you are a better driver. Here are some of the most common factors that insurance companies use to determine auto insurance rates. Some may surprise you.

  • Driving record: Your driving record and specifically the number of citations you have on your driving record is a huge factor in insurance costs. The more traffic tickets you have, the higher your rate will be. This is especially true for any serious offenses like a DUI or reckless driving for example.
  • Family’s driving record: If you have a joint policy with your spouse or other family members, their driving record will also affect the rates of your insurance plan. Since all the driver’s are normally covered on all the cars, one poor driver can drive up everyone’s rates.
  • Your vehicle(s): The newer and more expensive your vehicle, the more expensive your insurance can be. However, sometimes the type of car you drive can also affect rates. Faster and sportier cars generally have higher insurance rates.
  • Gaps in coverage: Any gap in your insurance coverage, even for a day, makes you a riskier driver in the eyes of the insurance company. The more gaps you have in auto insurance coverage, the higher your premiums will be.
  • Credit Score: Few people are aware that your credit score actually impacts the price of your auto insurance. Insurance companies believe that people with higher credit scores are less likely to be involved in accidents and are safer drivers in general.
  • Where you live: Your zip code can be a major factor in determining your auto insurance rates. In areas with higher crime rates, car insurance tends to cost more. Also, urban areas or places with higher populations usually are more expensive because insurance companies believe that since there is more traffic the likelihood of an accident is higher.
  • Annual mileage: The more you drive each year, the higher your insurance costs. Insurance companies believe that the more you are on the road the more likely it is that you will be in an accident.
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