Have you recently received a renewal notice for your auto insurance, only to find that your rates have changed? There are many factors that can affect your rates, some of which may be out of your control, and others you have at least some control over. By having a better understanding of factors that can cause your rates to increase or decrease, you can be a better-informed policyholder.
Your Driving History
One of the biggest influences on your auto insurance premium is your driving history. If you've recently been in an accident or even received a speeding ticket, there's a good chance this will cause your rates to increase. That's because your state is required to report accidents and moving violations to your insurance carrier. On the other hand, if you've recently had an accident or ticket "fall off" of your record, you may find that your rates have happily dropped.
Your Credit Score
Auto insurance companies must also consider your credit-worthiness when taking you on as a policyholder. This is why a credit check is generally run before your policy is put into place. If you have poor credit, you may be considered a higher risk and therefore have higher rates to reflect that. If you have decent credit, on the other hand, you may find that your rates are slightly lower.
The zip code where you park your car at night can also significantly affect your rates. Auto insurance companies use crime and accident maps to calculate the risk of your vehicle being involved in an accident or other types of claims. If you've recently moved and your rates have increased, it's possible that the area you've moved to has a higher rate of accidents, vehicle break-ins, or similar incidents.
Your Chosen Deductible
Last but not least, remember that the deductible you've selected for your policy will have a direct impact on your rates. A lower deductible will result in a higher policy premium, whereas a higher deductible means you'll save money on each monthly payment. Just be sure that the deductible you've chosen is one you'd be comfortable paying if you needed to file a major claim.
There are many factors that can affect your auto insurance rates, but these are a few of the major ones. If you have any additional questions or concerns about your rates changing, be sure to speak with your agent.