Have you ever wondered why you’re paying so much for car insurance? The reality is that not everyone pays the same rate, and depending on the person’s situation, they are likely to pay more for it. Here are some reasons why you might be overpaying for car insurance:
You Have Bad Credit
If you have bad credit, it might be best to fix the issue and boost your credit score before quoting a price, because many insurance companies consider your credit score when determining the amount you’ll pay. Therefore, even if you have a great driving record, having good credit is also equally important when getting a good rate.
Where You Live
Your address is also taken into consideration when you’re getting an insurance rate. There’s a bigger chance that people who live in more dangerous neighborhoods will get their cars stolen or be involved in a car crash. They will also consider where your car is parked, so if your car is kept in a locked garage, you might be able to get a better rate.
Your Car Model
Do you have an expensive vehicle? There’s a big chance you’ll pay a lot more for auto insurance if your car is more likely to be stolen, like a sports car or luxury car. That, as a consequence, is a high risk to the insurance company.
You Don’t Have a College Degree
A study from the Florida Insurance Commissioner suggests that people with a college degree are more likely to be offered better insurance rates. It’s not always clear if the insurance company you’re quoting a rate is taking your education level into consideration, but you can infer it if they ask such questions in your application.
You’re a Man
Did you know that men pay about 20% more for insurance than women? The reason why is because studies show that male drivers are riskier drivers and more likely to be involved in a fatal accident.
Being young can be pricey when it comes to auto insurance. Learning how to be a good driver can take a long time and practice. Therefore, young drivers being more inexperienced and more easily distracted are likely to pay more for insurance.
Statistics show that there’s a bigger chance that couples will be more careful drivers. Insurance companies perceive couples as less likely to claim, so being married can pay off on insurance.
Poor Driving History
This goes without saying, being a bad driver is going to be costly. Having many tickets in your name is going to make you pay more for auto insurance. So if you want to save money, it is always a good idea to keep a clean driving record for your safety and wallet.
You Rent Rather Than Own Your Home
According to a study conducted by the Consumer Federation of America, renters can pay as much as 6% more for car insurance. However, not all insurance companies use this method to give you a rate, so if you ask and they tell you you’re being charged more because you’re a renter, you can quote a better rate elsewhere.
How Much You Use Your Car
How long is the journey you take to get to work? If your commute is long, you might end up having to pay more for insurance. Insurers also take car usage into the account, so the less you use your car the better.