When you pay your insurance premium for your vehicle, do you ever wonder how that rate was established? When you purchased auto insurance, you may not have put much thought into how the data on YOU was compiled to arrive at a rate that factors in much about you and much about people totally unrelated to you. Knowing factors that affect your auto insurance rates will help you understand the next time you pay your auto insurance premium.
It’s Based on Risk
Auto insurance companies rely heavily on statistics that have been established over time to predict the risk of an auto accident happening. Their job is to assess the risk and then apply an insurance rate that is compatible to the risk. Below are just some of the factors that are evaluated when establishing risks:
- Driving Record
- Type of Car
- Annual Mileage
- Insurance Credit Score
- Accident History
- Residential Location
- Driving Experience
All the above listed factors come into play when insurance companies are compiling information on you to evaluate the type of risk you represent. Simply put, the greater the risk, the higher the insurance premium.
Ways You Can Reduce Your Insurance Rate
While some of the above listed factors are out of your control, you can take control of other options that can reduce your insurance rate. Below are just some of the ways you can positively impact the amount you pay for auto insurance:
- Change your residence to a rural area
- Bundle your auto and home coverage
- Increase your deductibles
- Reduce annual mileage on your vehicle (car pool or public transportation)
- Take a safety-driving course
- Drive a car with a high safety record with safety features
- Contact your Alabama independent insurance agent to discuss possible discounts applicable to you
Other, Nonrelated Factors Do Impact Auto Insurance Rates
Unfortunately, one of the biggest causes of increased insurance rates is due to distracted driving. It doesn’t take long to find distracted drivers on the road talking on their cellphones, looking at GPS, fiddling with the radio, or even updating their status on social media. Distracted driving has caused a significant spike in auto accidents and as a result, insurance companies have taken a huge hit. Increased auto accidents leads to higher insurance rates for ALL!
Contact Your Alabama Independent Insurance Agent TODAY!
Burkett & Associates Insurance Agency is here to assist you with any questions you may have regarding your auto insurance rate. Our main objective is to offer auto insurance protection to you at an insurance rate that you can afford.