Car insurance premiums vary from person to person and from state to state. So how does an informed consumer know which factors impact premiums, or how often to shop around?
First things first
All insurers base their rates on risk and take a variety of factors into account. Some of these include:
- age of policyholder/driver
- years of driving experience
- driving history
- credit history
- claims history
- vehicle type and year
- marital status
Most states (but not North Carolina) take gender into account, since statistically women tend to have fewer accidents than men. Younger drivers, who get into more accidents than older drivers, and people with poor driving records tend to pay more in premiums.
In addition, choosing a policy with a higher deductible usually will result in a lower premium, while lower deductibles lead to higher premiums since the insurance company will pay more in the event of an accident.
So am I stuck with my current premium?
The short answer is likely no.
Most industry experts suggest examining your coverage yearly to determine whether it still fits you and whether you can lower your premiums. A quick call to your agent can help answer those questions and determine whether you qualify for discounts.
But you don’t have to wait a year to investigate. Perhaps the optimal times to investigate occur following life events that can result in rate changes. Here are some examples:
- Your credit score has gone up or down significantly.
- You’ve had a birthday.
- You’re adding another driver (such as a spouse or child) to your policy.
- You’ve had a car accident, traffic ticket, or DUI (or it’s been three to five years since your last one and the violation is falling off your record).
- You’re about to move.