What Actually Affects Your Car Insurance Premiums?

What Actually Affects Your Auto Insurance Premiums?

When something happens to your car, the first thing you think to yourself is, “Will my insurance cover this?” The second thing you might wonder is, “Will this jack up my insurance rates?”

No one wants to start paying higher premiums after one mistake on the road or a misfortunate stroke of unluckiness. However, sometimes what happens to your car can permanently change the price of your auto insurance.

If you’re wondering what will raise your auto insurance rates and what won’t, here are five of the top factors that will cause you to pay more each month.

1. Getting in an accident. This is the number one thing that will cause your insurance premiums to increase. People who are in more crashes generally pay more than those who are able to safely avoid accidents. The longer you are accident-free, the less you will pay. Even one small accident can stay on your record for years.

2. Receiving a ticket. Whether you forgot to turn on your blinker or you were going 15 miles over the speed limit, receiving a citation from an officer of the law can cause your insurance premiums to climb. Fortunately, you can often avoid the increased prices by removing the citation from your record with a defensive driving course.

3. Moving to an accident-prone area. If you live in a safe area where few crashes occur, then your insurance will be less expensive. On the other hand, if you move to an area where insurance claims are frequent and your odds of getting in an accident are higher, you’ll have to pay more for the same coverage.

4. Buying a risky vehicle. Sports cars, luxury vehicles, and trucks with large motors are all more expensive to insure because they are often associated with higher levels of risk. If you really want to save money on your auto insurance, go with a smart car or an eco-friendly ride that is cheaper to insure.

5. Ruining your credit score. Auto insurance companies use your credit score as a method of predicting your reliability and therefore your risk. If you trash your score by forgetting to make payments or wracking up a huge credit card balance, you could end up paying more for your car insurance.

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