While there are a number of different factors that influence car insurance premiums, probably the biggest determinant of your car insurance premium is you and your driving habits. In other words, insurance companies determine what risk your driving entails and charge accordingly. Understanding precisely how your driving habits impact your auto insurance rate will help you know what to expect and perhaps better position you to make good choices to lower your premium.
Driving Record and Safety
Your driving record perhaps is one of the most fundamental variables utilized by insurance companies in the determination of your premiums. Continuous good driving, characterized by no accusations, accidents, or claims, depicted responsible driving and hence tended to reduce the perceived risk and justified lower premiums. On the other hand, if there are frequent accident involvements or issuance of traffic tickets, all this may indicate that one is a high-risk driver and hence an increased premium. Obey traffic rules, never speed, and drive safely to keep your record clean for lower insurance rates.
Mileage and Use
Time you use on the road and the yearly mileage that affects your rate mile-high. Most insurance firms charge less for low-mileage drivers annually because the less time spent on the road, the lesser the chances of meeting an accident. If you drive fewer miles, you may get a low-mileage discount. On the contrary, high mileage means greater the chance of accident and high premiums paid. This could help in reducing the cost of insurance if one monitors his or her mileage and thinks of ways how to possibly reduce driving the car by probably carpooling or using public transportation.
Driving Habits
Driving habits include how fast one drives, frequency of stops, and how he or she drives. These also affect your rates. Driving behavior is also considered reviewed by insurers through telematics devices or mobile apps installed on usage-based programs in auto insurance. These programs utilize a device that records how smoothly one accelerates, does not make abrupt stops, and observes the speed limit for premiums to be lower. Whereas, high rates apply when driving is aggressive, frequent hard braking, and speeding are observed. The soft driving style should be cultivated not just for safety but also as a way to be rewarded with cheaper insurance.
Location and Perceived Exposure to Risks
Where the driving and parking take place does affect the rates you pay. Insuring a car in an urban area that is both high-traffic and crime-bothered usually implies greater exposures to accidents and theft compared to rural areas. Thus, if one resides in a high-risk area, their premiums may be higher than those who live in less prone territories. Also, a factor that could affect your risk profile is where you have your car parked-on the street or in the garage. Parking in a safe location will reduce the occurrence of theft or vandalism of your car, which means lower insurance premiums.
Professional and Personal Use
How you use your car also matters. If you use it for business, the rates are bound to be higher because business use translates to more claims and more cost to the insurer. If your primary usage of the car is within the course of conducting business, you may need a commercial auto policy, which can also be quite expensive. When you tell your insurance company as to what the primary use of your vehicle is for, it means you are giving them the right information, getting the right coverage, and this will prevent an unexpected spike in premiums.
Defensive Driving Courses
This is actually aided by taking defensive driving classes, which will help in keeping the insurance rates lower. As a matter of fact, most of the insurance providers offer special discounts for drivers who take approved courses in defensive driving. Generally, defensive driving courses improve your driving skills and lower the odds of an accident. These demonstrate to the insurers that you are a lower-risk driver whom they can trust. Undoubtedly, the classes improve driving skills, and dividends soon appear in the form of lower insurance premiums.
Insurance rates are highly determined by driving habits such as maintaining a clean driving record, keeping your mileage usage to a minimum, driving safely, and appropriately reporting the usage of your vehicle. Knowing more about how your driving is affecting what you’re paying for insurance and making improvements could lead to lower rates for you and the best value in insurance.