Insurance Rates: Why Are They So High?
April 19, 2016 / Sara Davis / Learn About Auto Insurance
Aside from which car you're going to get, the next thing you should be thinking about when buying a new vehicle is what car insurance you're going to purchase.
Auto insurance rates is one of the most important aspects to consider when buying a car. First, having it is the law in 49 states(unless you live in New Hampshire).
Also, there are minimum requirements which vary by state, according to NerdWallet.
These minimum requirements are put in place for a reason, as the idea is to protect the finances of car owners in the state.
Why Insurance Is Important
Street Directory illustrated what a world without car insurance would look like. In this world, if you were in an accident where you were at fault, you would have to pay for the injured party's medical bills for many years, rather than having any help from an insurance company.
There are also instances where insurance comes into play when no one is at fault. For instance, what if a tree falls over right onto the roof of your car?
With an insurance plan, you will have help paying for the damages. Without it, you'll be stuck funding an expensive repair bill, buying a new car or simply not have a vehicle to get around in.
Important though it is, there is also one factor that makes some people wish they could go without car insurance: the cost. It's true that car insurance can be pricey.
But do you know what is really behind pushing those prices up?
Your Permanent Record
The way you drive has a lot to do with how expensive your insurance rates will be.
If you display reckless habits, like speeding or running red lights, these will typically bump up your insurance premiums for at least three years, according to CreditRepair.com.
If you have more serious offenses, like driving while impaired or a hit and run, these will most likely cost you even more or even result in a suspended license.
Men Vs. Women
Your gender probably plays a part in determining how much you'll pay to insure your car as well. According to the Insurance Information Institute, women generally have fewer accidents than men.
Because of this, men likely will be charged more for insurance than their female friends.
Better In Time
While you are basically in control of your driving record, there are some factors you simply can't change that will up the price of insurance. Your age is one of them. Drivers younger than 25 and older than 70 generally have higher rates than motorists whose age falls in that range.
Younger drivers insurance rates are more because they're more likely to be reckless, not wear a seatbelt and they lack driving experience.
Older drivers have higher rates because it is around that age that people begin to have decreased eyesight and motor skills and are more likely to be on prescription medications to help with health concerns.
Location, Location, Location
Where you live plays a role in determining how much you'll be charged for insurance as well. People who live in rural areas and small towns are generally given a break.
Because it's less likely their car will be stolen or damaged than a car parked in a city.
The Insurance Information Institute pointed out that what state you live in matters too, and not just in terms of the minimum insurance required by law.
States sometimes vary in terms of the cost of medical care and car repair costs as well as the frequency of auto insurance fraud. All of these factors will come into play when determining how much you should pay. Plus, certain areas of the country are subject to more severe weather patterns than others, which can also push insurance rates up.
It's not just where you live that makes a difference: Where you park your car is another factor as well.
If you park your car in your garage every night where it is safe and sound from harsh weather or vandals, your insurance could be lowered because of it. If you park it on the street or in your driveway, though, it's more likely to be hit by a rogue vehicle, stolen or damaged by a sudden hail storm or other type of weather event.
When looking for car insurance, it's a good idea to shop around for the best deal.
But remember that some things are in your control – like how well you drive or where you keep your car – while other factors might play a factor no matter where you go.
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