Your insurance rate depends on a number of factors. Some are out of your control, like the payout from an accident. Minor fender-benders do not usually result in higher insurance rates. Other factors affect your rate, such as your age, gender, mileage, credit score, and the amount of deductible you choose. In general, if you drive less than the recommended amount, your rate will be lower.
First, it’s important to understand how your insurance rates are determined. Rates increase over time because insurance companies pool drivers with similar characteristics to determine how much they will charge. Consequently, auto insurance rates are rising at a higher rate than the general rate of inflation. It’s also important to understand that insurance premiums are based on a number of factors, and many drivers may not understand the reasons for their high premiums.
In addition to your driving record, where you live can have a large impact on your insurance rate. Insurance companies in large metropolitan areas tend to charge higher rates than drivers in less densely populated states. The higher the population density, the more car accidents occur. Also, speeding is a factor in accidents and crashes, so your insurance premium may be higher than elsewhere. Additionally, a long commute is another factor that may affect your rate.
The unemployment rate may also influence your premiums. With an unemployment rate at an all-time low, most people are driving for leisure, which is a common way to increase premiums. And if you have the extra money, raise your deductible to $1,000. This way, you’ll be taking on more risk, but you’ll have extra money in the bank to cover the costs. Insurers also reward safe driving, so raising your deductible can make sense for your budget.