When trying to figure out how to buy car insurance, the options can seem overwhelming. There are many companies to choose from and even more advertisements trying to convince you that one company is better than another. Every auto insurance company has their own auto insurance rates and individual formulas for calculating those rates. Unfortunately, most companies try to keep their formulas very secretive therefore it can be difficult to compare car insurance quotes and assess what factors may make one one quote higher than another.
There are many businesses and websites dedicated to offering comparison tools and evaluations each year, but to be sure that you are getting accurate information, it is advisable to do the research yourself or to hire an independent insurance specialist whose only goal is to find you the best deal.
In order to compare car insurance rates, there are many factors to be aware of. At Gebhardt Insurance Agency, we want you to make the most informed decision to save money. Keep reading to find more information about what factors may be affecting your rate and how to compare auto insurance quotes.
Factors That Affect Your Rate
Driving Record
The number one factor that car insurance companies use to determine your rate is your individual driving record. There are many aspects that play into this factor such as a limited history, claims, at-fault accidents, and other incidents. It is rare to find a company that will not use a checkered history against you when determining rates, but different companies definitely factor this into account in different ways therefore it is worth it to shop around if your driving record is affecting your premiums in a negative way.
Accident Record
At-fault and no-fault claims affect your rates in different amounts but each will play a role in your rate. Typically, having one or more at-fault claims or violations on your record will cause your premiums to increase for at least 1-3 years. Some companies vary in this therefore it is good to assess quotes for future possibilities.
Checking how rates fluctuate with an at-fault accident on your record at one, three, and five years after the incident will give you a good indication of how an accident will affect you. It is sometimes the case that you would actually save money paying for a low-cost accident out of pocket rather than reporting a claim to your insurance because of rate increases.
Many insurance companies now offer accident forgiveness options to be added to policies that will give you a locked rate if you have under 2 no-fault claims on your record.
Incident Record
Incidents may include a DUI, DWI, reckless driving, or any ticket for something similar. Depending on the severity of the incident, your rate may be affected significantly even so much as disqualifying you from purchasing insurance from certain companies. In this case you may need to carry non standard insurance and those options will vary by company. Typically an incident of this nature on your record will affect your rate from 3-10 years therefore it is necessary to assess these options if you have an incident on your record. Sometimes switching companies may lower your rate if you are currently being penalized for an incident.
Age
It is commonly known that age plays a factor in auto insurance rates. Teen drivers notoriously have the highest rates of any age demographic, followed by senior citizen drivers. Adding a teen to your policy or aging can sometimes double your rates therefore changes in your life status should always be cause to go shopping for car insurance.
On the flip side, drivers between the ages of 25-60 may see a drop in rates with a clean driving record therefore reassessing your insurance company when you reach any age milestone could be beneficial.
Gender
Some states such as California, Hawaii, Massachusetts, Montana, North Carolina, Pennsylvania and Michigan have passed laws banning the practice of using gender as a rate determining factor for car insurance rates.
In other states though, companies use this as a factor based on accident and incident data. For instance, sometimes, adult women drivers are charged a certain percentage higher premium than their male counterparts while the reverse is true for teen drivers. Teenage males are typically deemed more reckless drivers therefore their rates will be higher than a teen girl without violations.
Vehicle
The type of vehicle being insured plays a huge role in your insurance rates. This is because the cost to replace your vehicle in the case of an accident will be much higher with pricier cars. Typically high priced vehicles such as luxury vehicles or trucks incur higher rates than a sedan or used vehicle. This is a factor to consider when comparing auto insurance rates but also when purchasing a vehicle.
Location
Your area of residence or area where your car is driven the most will play a factor in the rate you receive from any insurance company. Typically, larger cities with a higher concentration of people and vehicle traffic will have higher insurance rates across most companies. The other side of the coin is that rates will be lower for areas that are more rural or that have higher foot than vehicle traffic.
Your home type can also play a factor in your rate regardless of city. For instance, insuring a vehicle that is typically parked in a closed garage in a neighborhood is less of a claim risk for insurance companies than a vehicle that is parked in an open lot at an apartment community with higher risk for theft or accidental damage.
Credit Score
The last but not least major factor that is considered when calculating insurance rates is your credit score. Having a good credit score will provide you with better rates because the insurance company sees a higher chance that your bill will be paid on time and in full. Likewise, having a low credit score with a history of non-payment can affect your premiums and options for coverage negatively. This is not necessarily a factor that all companies use though so if you are concerned that your credit score may affect your rates it is wise to check with a few companies for their policies.
Process of Comparing
When beginning the process of comparing insurance rates it is good to start with a plan of action. Knowing these steps and what to expect will be helpful in ensuring a smooth and easy process.
Know Your Information
Now that you know there are many factors that will affect the rate you are offered from different companies, before beginning your search, you should make a list of all your personal information that could affect your rate. Have on hand your information such as age, address, and vehicle make, year, and model. Also having a description and date of any accidents or incidents will help you to ask better questions when comparing rates.
Having a general idea of your credit score ahead of time can also be helpful because working towards building your credit for a few months before switching to a new plan may help you to lock in a better rate.
Before making any comparisons or phone calls it is a great idea to write down any questions or concerns you may have that way you do not leave anything out when assessing and you will know that you were thorough in your inquiries.
Choose Coverage
Most places have a state minimum of liability coverage that every motor vehicle must carry without exception. It is wise to do your homework and research what your state requires before having conversations about the coverage you need.
Arizona state law requires that drivers carry a minimum of $25,000 per person and $50,000 per accident in bodily injury liability insurance and a property damage liability coverage of $15,000 minimum.
These laws do sometimes change so if you have not assessed your coverage in sometime it is wise to look over your coverage and decide if you need to make some changes.
Collect and Compare
Unfortunately, collecting rate information and comparing prices is the most tedious part of the process of shopping for insurance. If you wish to truly assess all of your own personal information this may require making many phone calls to go through the process of collecting quotes from every insurance company that is popular in your local area.
It is a good idea to seek out which companies are most popular with your friends and neighbors and start from there, you may find that rate differences are negligible or easy to choose from.
Gebhardt Insurance Group
At Gebhardt Insurance Group it is our desire to earn your trust by finding the best rate available for you and your insurance needs. We do not sell our own insurance but shop most major and local companies to compare prices for your specific needs.
If you would like to compare insurance plans but do not wish to do the legwork yourself, we would love to partner with you. Call us at (520) 836-3244 to begin the conversation of buying car insurance today.