Two Surprising Factors That Can Dramatically Influence Your Auto Insurance Premiums

If you're a new driver or have a brand new vehicle, establishing an auto insurance policy is one of the first things to do before you get behind the wheel. Although auto insurance may sound like a pretty straightforward concept, many individual factors go into determining your coverage and premiums, from your driving history to your credit rating. Your auto insurance agent will also ask other key questions, a couple of which may be more impactful to your premium than you realized. Keep reading to learn about them.

How Much You Drive

How much you drive can significantly affect your auto insurance costs, so it's one of the first questions your auto insurance agent will ask. People who drive less—generally 12,000 or fewer miles annually—can get auto insurance discounts. 

The savings improve further with lower mileage, with the largest discounts going to drivers who put fewer than than 7,000 miles (or, better yet, fewer than 5,000 miles) on their vehicle yearly. 

Driving fewer miles means less time on the road and a reduced risk of auto accidents, so auto insurance companies are happy to reward drivers who have this lower level of risk. 

Whether You're a Rideshare or Delivery Driver 

Asking whether you're a rideshare driver or deliver food or groceries is a standard part of establishing an auto insurance policy today. 

Your agent has to ask this question because a standard auto insurance policy doesn't cover any event that happens in the course of your work. To get this type of coverage, you'll typically need to buy a policy add-on. Some auto insurance companies charge around 15-20% of your total policy for a rideshare add-on, but some auto insurance agents charge a set lump sum instead.

If you're a rideshare or delivery driver who doesn't arrange the appropriate coverage on your vehicle, you could face auto insurance policy cancellation and full liability for damages in the event of an accident. Fortunately, most auto insurance companies cover people who work as rideshare and delivery drivers, so your auto insurance agent can easily help you get set up and on the road safely.

You probably expect the routine questions about your driving history when applying for auto insurance, but you're now aware that it's not the only thing your auto insurance agent needs to know. With your new knowledge of these lesser-known but very important questions, you're ready to call your nearest auto insurance agent and get on the road now. 

Contact a company like Insurance Service Associates to learn more. 

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