Factors That Impact Car Insurance Premium Negatively and What You Can Do About It

Car Insurance rates

A number of things affect our auto insurance rates. Some work to our advantage and lead to discounts, whereas others get us deemed risky customers and lead to higher insurance premiums.

There may not be much we can do about how old we are and where we live, but there are certain factors that impact our premiums negatively which we do have control over. Read on to find out what these factors are and what you can do to stop them from creating a bigger hole in your pocket.

Your Driving Record

Car InsuranceAre you a good driver or a bad driver?

How many tickets have you received so far?

Do you have a habit of driving too close to the vehicles in front of you?

Have you at any point in your life ignored traffic signs or displayed an inability to resist the urge to press the accelerator all the way down?

All those major and minor traffic indiscretions can have bigger consequences than earning you tickets.

One of those is affecting your auto insurance premium for the worse.

Your driving record as well as all the traffic tickets you’ve accumulated along the way will be taken into account by your insurance company when drawing up a policy for you. The more (or the worse) traffic violations you have to your name the heftier your premiums will get.

“Rack up a combination of the nastiest violations plus a few accidents, and insurers may even refuse to cover you, says Loretta Worters, spokeswoman for the Insurance Information Institute, a trade group.” You can read more on >costly traffic violations here.

What to do about it:

Become a good driver. It really is that simple. Don’t engage in the kind of behavior on the road which invites sanction from the law and makes you look like a careless driver.

If you don’t know how to do it, you can attend a defensive driving school where they teach about better driving, consideration towards others when you are behind the wheel, and becoming more aware of your surroundings, among many other things. This is particularly helpful to those with a less-than-perfect driving record. Your insurer may drop your rates if you undertake this course.

Alternatively, if you feel you have been unfairly ticketed, don’t pay the fine. You have the right to challenge it in the court. Take that road, and if you win the case the violation charge against you will be null and void. Meaning, it won’t affect your auto insurance premiums.

Your Marital Status

Sounds laughable and deeply unfair but that’s how it is. Many insurance companies offer discounts to married drivers. The reasoning is that if you have a family to look after you are less likely to indulge in reckless driving. There’s also apparently some statistical evidence that claims that married people are less likely to develop dementia, hence less likely to morph into dangerous drivers!

While not all insurers offer this discount, it certainly is great news for car drivers who are married, but what about those who aren’t?

What to do about it:

If you are in a relationship, get married.

In all seriousness though, there isn’t much you can do about this. It’s not that your relationship status is acting against you when it comes to car insurance premiums, more like it isn’t helping your case. If you find this discriminatory or morally unacceptable, opt for insurers who don’t indulge in this practice. The good news is that if an insurer is offering this discount they are likely also offering other discounts, such as multi-vehicle discounts, accident-free discounts, gender-related discounts, etc. Scour their literature to find which discounts you are eligible for. Even better, check out the list of all car insurance companies in the US to gain a good understanding of the options available to you in this regard.

Filing Too Many Auto Claims

How many is too many?

Depends on the insurer. But if they trace a pattern in your auto claims history of being too, proactive let’s just say, they may mentally and technically classify you as a high-risk customer.

A bit like a woman who accuses people of sexual harassment wherever she goes; instead of being considered a victim, it’s her credibility that comes into question. Similar seems to be the case with drivers who have been on a claims filing spree in the past. Dangerous customers and all that.

What to do about it:

Don’t file claims unless you have solid reasons to do so. Solid reasons meaning you have been in an accident that caused significant damage to your vehicle and/or injuries to yourself. If the damage suffered is minor or the cost of it is below your deductible, we recommend you pay it yourself.

Also bear in mind that if you have been in an at-fault accident and file a claim, you can expect your premiums to shoot up (because you just told your insurer that you aren’t good enough a driver!).

A Low Credit Score

Seems like we are being judged left, right, and center, aren’t we?

The insurers have their reasons for thinking the way they do, and there seems to be little we can do about it other than clean up our act, which, if you think about it, is a good thing.

Credit score happens to be another factor which the insurers refer to when determining risk. If you have a low credit score, or if it has dropped lately, work on fixing that or it will impact your auto insurance premiums negatively.

What to do about it:

Pay your bills on time, don’t miss loan repayments, use your credit card wisely, and do your best to hold on to a job even if you don’t like it. Car insurance premiums are only one of the many things that a bad credit score affects.

About the author:

Lori Wagoner is a marketing and business consultant working with All Car Insurance Companies which is a realtime online platform for reviews of auto insurance companies, comparison of quotes, and discussion/resources related to the car insurance sector in the U.S. Catch Lori on Twitter @LoriDWagoner.

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