Why Do I Pay So Much For Car Insurance?

There are many factors that insurance companies take into consideration when determining your auto insurance rate. Not all insurance companies think each factor is as important as the other and thus creating such a wide range of auto insurance rates for just one consumer. First and foremost, the insurance company is going check out your DRIVING HISTORY. Statistically speaking, the more at fault accidents or tickets that you have, the more likely you are going to cost XYZ Insurance Company money. Secondly, they are going to look at your CREDIT HISTORY. A common misconception is that the insurance companies look at your credit report, for example, Equifax, Experian, or Trans Union. This is not the case. Insurance companies do what is called a ‘soft hit’ on your credit history, not your full credit report. Third, they are going to consider what TYPE OF VEHICLE YOU DRIVE. Is it an SUV? Does your vehicle have an excellent safety rating according to the National Highway Safety Advisory Committee (NHSAC)? Is it considered high performance, an antique, etc? Another important factor that XYZ Insurance Company looks at is HOW MANY CLAIMS HAVE YOU FILED RECENTLY? If you are prone to turning in a claim to fix the $180 dent in your fender, then that is going to cost you some extra money. One of the last things that will be considered when determining a non discriminatory rate for you is WHERE DO YOU LIVE? Many insurance companies will break their rates up according to zip codes. Some zip codes have more people, more traffic, and more accidents. This will affect your probability of costing XYZ Insurance money.

If you are negatively affected by one of these criteria, I recommend shopping your insurance around. Like I say, if you are paying more because of your claims history there may be another company that specializes in giving more affordable insurance to people in your situation. If claims are something holding you back from getting your best rate, consider raising your deductibles to $1000. You will be surprised at how much you save a year.