6 Key Factors That Influence Your Car Insurance Premium Rates

An insurance company calculates your premiums rates based on different rating factors. Here are the six most common rating factors.

1. Driving History

Your driving history is a significant factor to consider by any insurance company. They consider your driving history to make predictions about your future performance. So, if you have a previous record of violations, your car insurance provider will consider you high risk. Thus, you will need to pay higher premiums.

2. Age

Insurance providers consider young drivers to be risky, and thus, they often charge higher premiums compared to those paid by older adults. Young teenage drivers get into accidents more often than other age groups, and are therefore, considered expensive to insure. However, after 20, age becomes a less significant consideration and continues becoming less significant as you hit 25 years. Also, elderly drivers above the age of 70 pay higher insurance rates for high risks, mainly due to concerns over eyesight problems.

3. Experience

A long driving experience implies less chance or mistakes as you drive; hence, low chances of having to file claims or violations. Therefore, you will be considered a less risky client, and thus, pay lower premiums if you've been driving for a while. On the contrary, a new driver without experience is more likely to make mistakes and will therefore be charged higher premiums.

4. Credit Score

Though often underlooked, a credit score is a significant rating factor. Clients with bad credit scores tend to file claims compared to those with good credit scores. Therefore, insurance service providers will always charge higher rates for drivers who have bad credit scores.

5. Insurance History

Inconsistent insurance coverage as a long-term driver often indicates high risk. The only exception to insurance history is made for new drivers. As an experienced driver, it is assumed you were licensed to drive, but you failed to get insurance. Therefore, you drove uninsured, and that makes you a high-risk client. Thus, you will pay high premiums.

6. Claims History

Every car insurance provider considers a lengthy claims history to be a warning sign. Have you constantly filed for claims, or have others filed numerous claims against you? Sadly, this may classify you as a high-risk driver and client. Hence, you might pay higher rates than other drivers

If you notice an increase in your premiums, it could be due to any of these factors. Ensure you have a good credit score and fewer violations to enjoy paying low premiums. For more information, contact a car insurance company near you to learn more.

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