There are a lot of insurance providers to choose from in the Green Bay area, and every one of them will likely give you a completely different rate quote for your car insurance. You might get two rates that are only a few dollars off, or you might go to one insurer and get charged one and a half, or even twice as much as you are at another insurer. They all have to assess risk when covering you, and the way they make that judgment will vary wildly between providers. But some car insurance rating factors are pretty much the same from insurer to insurer. Here’s what we mean:
How They Decide
- Age. Teens and twenty-somethings tend to pay a bit more for insurance even with all other car insurance rating factors being equal. There’s not much we can do about this except keep getting older. Some insurers will offer a discount for good grades for students, but young drivers are still going to wind up paying more for insurance more often than not.
- Gender. Women pay less because they are statistically less likely to get into accidents. You may be the safest male driver in the world. Maybe you never do the kind of things that insurers think guys do in their cars. But insurance providers have to look at statistics and probability when evaluating risk.
- Marital status. If you’re married, you are statistically less likely to get into a serious accident. We wouldn’t recommend getting married just to save on your insurance, but don’t be surprised to see your rates drop after getting settling down.
- The size of your car. Believe it or not, this can be a big car insurance rating factor. You feel safer in a big truck or SUV; you are more shielded in the event of an accident. But you can also do a lot more damage to your car. So big cars tend to be penalized because of the greater liability concerns that they come with.
- Where you live. If you live somewhere with a high rate of car thefts and break-ins, expect to pay a little more on your insurance. Again, it’s all about statistical probability.
- What your car costs. The more expensive your car, the more expensive it will be to repair or replace should the insurance provider have to cut you a check. So of course, the cost of insurance will reflect the cost of the car.
- When your car was made. This ties into the cost of your car. Newer cars tend to be more expensive, and therefore more expensive to repair, and insure.
Safety features can be a major factor, of course, and so can your driving history. But the above-listed car insurance rating factors tend to be universal from one provider to another. Your rates might vary wildly from one insurer to the next, but if you feel good about your chances after reading that list, then chances are you’re going to get a pretty good deal on your insurance. Providers need to assess risk and cost, and these factors are a big part of how they make those assessments.
Driving and Claims History
Insurers have no way of knowing if you will file claims against your insurance policy, but they can make reasonable assumptions about your future claims activity based on your prior driving and claims history. A driver with a record full of speeding fines, for example, may appear careless. The insurer may assume a driver with a history of recent accident claims has poor judgment when driving. Depending on the company’s underwriting requirements, this could result in higher premiums or disqualify a driver from coverage altogether.
Note that information about your driving and claims history is available to your insurer even if you do not offer it voluntarily. Not only can they pull your state driving record, but they can also see information in your CLUE Report (Comprehensive Loss Underwriting Exchange Report), which is generated by a consumer reporting agency that collects data about your insurance claims activity. Prior insurers likely reported your claims to CLUE, even if your claims were denied or never formally filed.
What does your FICO score have to do with your car insurance? As it turns out, quite a lot. Each insurer weighs the credit score factor differently. Purchasing coverage through an insurer that emphasizes the need for strong credit could be a mistake if you have some derogatory marks on your report. Even if your scores fall in the “good” range, you could end up paying hundreds of dollars less per year on premiums than someone with credit scores in the “excellent” range.
This explains why a driver with an excellent driving history and poor credit could end up paying more for coverage than a driver with excellent credit and a spotty driving record. That is why comparison shopping with an independent agent is so important. It gives you access to a wide range of insurers, allowing you to choose the one that shows the best rate for your individual circumstances.
Limits and Deductibles
As with most things, when it comes to your car insurance, you get what you pay for. A bare-bones insurance policy with poor coverage that barely meets minimum state requirements is likely to cost less than a policy that actually protects you against financial calamity. Although higher limits may come with a larger premium, the difference is negligible compared to how much money your insurance could save you in the event of an accident or vehicle-related lawsuit. When it comes to your coverage limits, this is not the place to cut back to save money.
Your deductibles, however, play a different role in your insurance coverage. A deductible is an amount you agree to contribute toward the cost of your claims. A low deductible means lower out-of-pocket losses after an accident, but it usually translates to higher premiums. Switching to a high deductible can help you save on the cost of your policy without sacrificing the value of your coverage.
Many insurers offer discounts to drivers who meet certain criteria. These can vary from company to company, but the savings can add up to 10, 15, or as much as 20 percent or more in some cases. For example, a discount may be available if you only drive your vehicle a few thousand miles per year or if you enroll in a defensive driving course. Savings are also sometimes offered to policy-holders who remain claims-free, pay premiums in full, or who have student drivers with good grades in high school or college. Talk to an agent to learn more about auto insurance discounts and which ones may be available to you.