What factors affect car insurance premiums?
When it comes to car insurance premiums, it’s not a one-size-fits-all scenario. Various factors nest together to determine the cost of your coverage. Let’s pull back the curtain and explore the factors that affect what you pay for your car insurance.
Driving History
Your personal driving history takes center stage. A clean record with no accidents or traffic violations is a great start for cheep-er insurance. However, a history of collisions or speeding tickets may lead to higher premiums. Having accident protection on your policy is a great way to help protect your driving record.
The Car You Drive
The type of car you drive isn’t just about style and speed; it’s a key player in your insurance premium. High-performance cars may carry a higher premium due to increased risk and repair costs.
High tech vehicles and options are more expensive to replace. Increased technology in vehicles increases the cost of repairs, in turn increasing the price on insuring those vehicles. Insurance companies also factor in the cost of labour, comparable rental vehicles, and the likelihood (statistically) of your vehicle being stolen.
Your Age and Experience
Young, less experienced drivers often face higher premiums. With time and a proven track record, you will see your premium decrease. There is often a significant decrease in premiums after about 6 years (dependent on other factors).
Location, Location, Location
Where you live can have a big influence your premium. Urban areas and cities may experience higher rates due to increased traffic, crime rates, and the likelihood of accidents.
However, if you live too far out of town and have a long daily commute or high yearly kilometers, you may also see a higher price for your insurance.
Coverage Choices
The coverage you choose had the greatest impact on the final price of your policy. Comprehensive coverage, covering a range of incidents, tends to cost more than basic liability coverage. But don’t forget – you tend to get what you pay for. Paying more per month could save you from paying for your entire vehicle if you’re in an accident.
Deductibles
Your deductible is the amount you must pay out of pocket before your insurance “kicks in”. A higher deductible often means a lower premium, but it also means you’ll pay more out of pocket in the event of a claim.
Credit Score
With some insurance companies, your credit score influences your premium. A higher credit score might lead to lower premiums, reflecting your financial responsibility.
If you agree to a soft credit check (does not reflect on your credit report) you can save big – insurance companies cannot charge you extra for low credit scores, your premium will either stay the same or decrease.
Discounts and Incentives
Insurance companies often offer discounts for various reasons – from bundling your policies, to being a safe driver, to your occupation or employer. Be sure to discuss all potential discounts with your Insurance Broker – you’d be surprised what companies will offer discounts for!
Understanding the factors influencing your car insurance premium empowers you to make informed decisions. It’s not just about the cost; it’s about finding the right coverage for your unique circumstances. Ready to soar through the world of car insurance? Contact our flock of brokers to get a quote or review your policy today.
