Rating Factors for Car Insurance
As drivers, we must factor car insurance rates into our budgets. It’s only natural, therefore, for us to try to make our insurance bill as affordable as possible.
Getting an affordable rate means more than just asking your AmeriAgency Insurance agent to find you the cheapest price. It also means taking proactive steps to keep yourself safe on the road. You can also stabilize your financial situation, which might help you find low-priced coverage. Let’s look at some ways you can help keep your insurance rates low.
Rating Factors for Car Insurance – Why Car Insurance Rates Vary
Each driver on the road is unique. As such, they each have a unique risk profile.
A driver’s risk profile demonstrates to an auto insurance agent how likely they are to file a claim in the future. Your insurance rates might vary based on your risk profile.
If you have a high likelihood of filing a claim, your policy prices might increase. This is because you represent more of a cost risk to your insurer. Click here for rating factors for home insurance.
What rating factors for car insurance does an insurer look at when calculating your risk profile? Insurers consider such factors as:
- Your driving record
- The coverage limits you choose
- Your credit score
- Existing SR-22 penalties
You can have a direct influence on these factors. By making good choices, you can help ensure your rates stay low.
Improving Your Driving Record
Auto insurance claims arise when your vehicle is involved in an accident or other incident that causes damage or loss. Insurers can get a good idea about how likely you are to file a claim by looking at your past driving history.
Your driving record might show previous tickets, wreck reports, arrests and other violations. Each notation might signal to your insurer that you are a high risk to file a car insurance claim. If they don’t like what they see, they might raise your policy costs.
Therefore, all drivers should strive to be the best they can be. Here are some tips to follow:
- Always drive with a valid license and registration
- Avoid reckless driving – including speeding, tailgating and driving without headlights
- Don’t use a mobile device when driving
- Never drink and drive
It can also be useful to enroll in a safe driving course. These courses help you brush up on your skills. Some insurers even offer discounts if you pass one of these classes.
Avoiding SR-22 Penalties
If you rack up particularly serious driving charges, your state might require you to get an SR-22. These certificates attach to your auto insurance, and prove for the state that you have an active insurance policy in place. But an SR-22 is also a surefire way to alert your insurer that you are a high-risk driver.
SR-22s might arise from such driving infractions as:
- DUI/DWI arrests
- Multiple or frequent accidents or tickets
- Driving without insurance or a license
If you find yourself facing an SR-22 penalty, make sure to report it to your insurer immediately. Your AmeriAgency Insurance agent can likely help you get the most affordable rates, even with these penalties.
Yet, a better way to save on coverage is to avoid an SR-22 penalty altogether. Drive safely, both to protect your rates and the safety of everyone else on the road. You control some rating factors for car insurance.
Improving Your Credit Score
It surprises many drivers to learn that some insurers look at their credit ratings when determining rates. Insurers do this because credit scores are a valuable measurement of risk.
For example, if you have poor credit, this might indicate poor financial habits. Therefore, you might be more likely to file an auto insurance claim should an incident arise. You’ll need the policy to pay because you don’t have the reserves on hand to pay for the repairs to your car on your own.
Also, insurers expect to receive payment for the premiums they assess. If your credit ratings show that you might be likely to default on payments, you might face higher rates.
So, do what you can to stabilize your credit. It should help not only with your insurance rates, but also with your financial security.
Rating Factors for Car Insurance – Choosing the Right Coverage Limits
One of the best ways to positively influence your insurance rates is to set up your policy to fit your own needs.
Car insurance policies must cater to specific drivers and vehicles. So, the monetary limits you select should reflect the value your vehicle holds and your specific budget. Should accidents happen, your policy should be sufficient to help cover the damage.
Ask your Insurance Agent to help you determine what monetary value you need on your policy. Your agent can help you determine the most secure limits. They can also ensure that the limits you select do not drive your policy price up unfairly. You control some rating factors for car insurance.
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