Your insurance rates are based on a number of factors, including where you live, what you drive, your driving history, insurance history, and financial history. And let’s not forget about age and marital status. Let’s review some of these factors and see how you can pay less for insurance.
1. Where you live
Houston is the largest city in the State of Texas, followed by San Antonio, Dallas, Austin, and Forth Worth. When you live in a big city you can expect to pay more for auto insurance because more drivers on the road leads to more accidents. The further out you live from the city, the lower your rates will be. Also, if the area where you live has a higher number of claims, including theft and vandalism, your rates will generally be higher.
2. What you drive
Lots of people think the newer the car, the higher the insurance - not exactly. Remember, there are multiple factors that help determine rates, what you drive is only one of them. Rates on your vehicle are based on the value and the cost to repair or replace it. And although the cost for repairs might be higher due to more expensive safety features found in newer cars, other features, such as airbags, anti-lock brakes, daytime running lights, and even automatic seat belts, help provide a lower rate.
Don’t forget to call your agent before you buy a car to have an idea of what the insurance will cost you. It will save you from an unpleasant surprise once you have made a new purchase. Considering a higher deductible can also help maintain a lower premium.
3. Driving History
Your driving record plays a big role in determining your rates. If you have tickets or accidents on your driving history, you will generally pay more for insurance than someone who doesn’t. A surcharge is applied only for the first 3 years from the date of the ticket or accident, but insurance companies often provide discounts for drivers who have maintained a clean driving history in the last 5 years. Keep in mind that if you have a not-at-fault accident, your rates could still be more than having zero claims.
If you do find yourself getting a ticket – don’t just pay the fine, choose to take a defensive driving course to keep the ticket off your record and avoid an increase in your insurance rates. Drive safe, pay less!
4. Insurance History
Having and maintaining financial responsibility (insurance) for at least six months – preferably a year, shows that you are a responsible driver and are rewarded with additional discounts. If you’ve had a gap in coverage of more than 30 days, insurance companies usually consider this a higher risk, making your rates higher. The longer you’ve maintained insurance, the better the rate. And the longer you’ve maintained insurance with the same company, the even better rate when it comes time to shop. Just like keeping a job for a longer period of time - it looks better on your resume!
5. Financial History
Maintaining a good financial reputation can help you save money on your insurance, just as it does with anything else. Insurance companies use a credit-based insurance score to determine your insurance rates as studies have found this helpful in determining possible future claims. It is important to review your credit reports at least once a year to ensure that the data is accurate. You can obtain a free annual credit report here, which does not include your credit score.
Age is just a number, but it is a factor used to determine the level of risk in the insurance industry. The younger the driver, the higher the rate will be – generally under 25. This is also the case when you become advanced in age.
7. Marital Status
Yes, if you’re married you get a better rate. For all the single folks out there, this should not be a reason to rush into things!
Everyone wants to save money but cutting corners on your insurance premium can mean leaving out coverage that may be beneficial in protecting your assets or settling for a policy that may not work well for you at a time of loss. There are other ways to save money on your insurance without jeopardizing your coverage. Here are a few discounts that could be available for you. The name of the discount and availability vary with each insurance company.
Multi-car discount – the more cars you have the lower the rates for each car
Homeowner discount – for those that own a home
Multi-policy discount – when you have more than one policy with the same company or same agent
Good driver discount – for those drivers that maintain a good driving history
Good student discount – for students that maintain a 3.0 (B) grade average or higher
Advance purchase discount – when you purchase your policy with a future effective date, usually 3-7 days in advance.
Advance quoting discount – obtaining a quote in advance of your effective date.
Pay in Full discount – because there is less of a chance that your policy will cancel for non-payment, insurance companies cut you a break.
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As you can see, there are many things that tie into your insurance rates. Remember, timing is everything - don't wait until your insurance is close to expire - Call us today!