Why Those High Car Insurance Rates Are Your Fault

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Why are car insurance rates so high? You’ve already spent a lot on the car, possibly purchased an extended warranty, and while you know you need auto insurance it always feels like you’re being scammed on those rates.

Here’s the deal: Everyone likes to score a great deal, and no likes to pay more for something than they have to. When shopping for auto insurance, many people try to find the average of what those around them are paying — thinking this is a “good” rate for the average person. It may seem like a smart strategy, but it won’t help you out. In fact, it may be a mistake.

Only liability insurance is used in annual statistics. That’s because it’s the only coverage that’s required by law for drivers to carry.  But many people also carry the recommended collision and comprehensive coverage, which raises the price of a policy even further. So, if your neighbor is bragging about how he pays only $500 annually for car insurance, he probably carries the bare minimum of coverage and is assuming more risk than you.

It’s also well known that auto rates are determined by status and age.

  • Teenage drivers (especially males) pay some of the highest rates in the country for auto insurance. This is because of their lack of experience behind the wheel, and the greater chance of accidents and citations.
  • Senior drivers on the other hand, pay the lowest rates of any group, even though there’s a debate about whether or not senior citizens are actually safer drivers.
  • Families—whether older or younger generations—pay less than the national average, as do married drivers over single drivers.

So, what are some other big factors that determine your annual policy rate?

1. Location
Urban areas in particular have higher traffic congestion, wages, gas prices, and car theft statistics. New Jersey and Washington DC residents have some of the highest premiums in the country. But, if you’re moving from Oregon to Florida, you’ll welcome the 7 percent drop in your policy rates. Those relocating from Nevada to Utah though will face sticker shock with a 5 percent increase.

2. Deductibles
Average drivers have a $500 deductible on their policy. It grants them reasonable rates and ensures they won’t have to pay too much out-of-pocket in case they need to file a claim. However, some people find $500 a major hardship. You can lower the deductible (depending on your insurance carrier) to $200 or $300, but your annual premiums will shoot up. On the other hand, some people prefer to raise their deductible to $1,000. It’s a quick way to instantly lower your rates.

3. Personal Driving Record
Citations, speeding, DUI’s and crashes all increase your rates or cause your auto insurance company to drop you altogether.

The quickest way you can find low auto quotes for your unique profile is to compare different insurance carriers online. You could see a major drop in price by perusing online quotes annually, so don’t cheat yourself out of your hard-earned money. After all, no one likes to pay more than they have to for car insurance.

Why Are Car Insurance Rates So High — Sources

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