It sometimes seems that the amount you pay each month for your auto insurance is completely unpredictable, liable to skyrocket at any time. However, there are a number of factors or events behind this seeming unpredictability. Understanding these factors can help you minimize your chances of overpaying for your car insurance.
# 1: Purchasing a New Vehicle
One of the most common reasons for your auto insurance rates to increase is purchasing a new vehicle. If your new car is worth more than your old one, the financial risk to the insurance company if you were in an accident increases due to the higher repair costs. Therefore, the insurance company will charge more for the new vehicle’s coverage in order to offset the added risk.
# 2: Driving Frequency
The more miles you drive per year, on average, the higher your monthly insurance bill will be. Depending on your lifestyle, career and other factors, this may or may not be something you can control. If possible, however, reducing your total annual mileage by carpooling or taking other means of transportation when you are able can help minimize your auto insurance bill.
# 3: Driver Age
Drivers who are 25 years of age or younger, or who are 65 years of age or older, tend to pay significantly higher rates for their auto insurance. This is simply due to the fact that these groups statistically are by far the most likely to be involved in an auto accident. Obviously, this is not a factor that you will be able to control; however, it does mean that younger drivers who are burdened by excessive insurance bills can at least look forward to them dropping in the future.
# 4: DUIs
Few events will raise auto insurance rates more than being arrested for impaired driving due to alcohol or some other substance. Insurance companies will consider a person with a DUI on their record a substantially increased risk, and will charge extremely high rates to insure this person – if they will insure them at all. Some companies will refuse to provide coverage at all in some situations, at least for a certain period of time.
# 5: At-Fault Accidents
Even if you are not driving while impaired, being involved in a car accident that you are later determined to have caused can also raise your insurance rates significantly. The exact impact such an accident will have on your costs can vary quite a bit from one company or policy to another. However, unless your policy includes some type of “accident forgiveness” feature (which will also raise your rates somewhat), you can expect to see your rates go up after the accident.
# 6: Driving Violations
Being pulled over and ticketed for some type of driving violation will also raise your insurance rates, even if you were not actually involved in an accident. For example, according to Insurance.com, a ticket for speeding 1 to 14 mph above the posted speed limit will likely raise your rates by about 11 percent, while a ticket for reckless driving will likely raise your rates by about 22 percent. The specific amounts will vary, of course, but driving carefully and obeying the law is a good way to minimize your chances of paying excessive car insurance premiums
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