Why Car Insurance Is So High

Driving an older car can be cheaper to insure.

A sometimes burdening yet necessary expense, having car insurance is the price you pay for having the ability to get yourself around town. One of the best ways to make sure you are receiving the best auto policy premium is by reviewing your policy with your insurance agent on an annual basis to make sure all your information is up to date and you are receiving all the discounts possible.

Your Driving History

Following the instructions in the Department of Motor Vehicle (DMV) handbook can get you a long way. All moving traffic violations and at-fault auto collisions can affect your car insurance rate. Most auto insurance companies will charge higher premiums for accidents and tickets that happened within the last three years. Offenses that are more serious, such as a drunken driving violation, can affect your insurance rates for a minimum of five years.

The Car You Drive

Rare car models, classic cars, luxury cars and sports cars can be more expensive to insure. This is because the cost to repair these cars can be more expensive. Additionally, there is a larger occurrence of accidents with some sports cars because of the speeds they produce. Mass produced, older cars that have a reputation for reliability are typically cheaper to insure.

Your Age

Younger drivers, because of their inexperience and higher rate of at-fault auto collisions, tend to have higher insurance rates. Rates typically lower around the age of 21 for females and 23 for males. Senior citizens tend to have higher insurance premiums as well because of the higher rate of at-fault auto collisions that occur among the elderly population.

You Do Not Know Your Auto Insurance Coverage Needs

The type of coverage you have on a car will affect your insurance rates. While it is necessary to have some cars insured with full coverage insurance, like those that are financed, some cars may not need it. For example, if you are paying $200 per month to insure a car with a full coverage policy, and the car is only worth $800 dollars, you will pay more in insurance premiums than the car is worth before the term of the policy expires. As a result, it may be more cost-effective to simply have liability insurance on the car and save the rest of the money in the event it needs repairs. In addition, if you have a recreation vehicle or a car you only drive once in a while, it will be expensive to insure it with a liability or full coverage policy as if you were driving the vehicle every day. If you have a car that stays parked most of the time, placing comprehensive insurance on it while it is parked and then adding liability or full coverage protection only when you want to drive it can save you money. However, it is always best to talk to your auto insurance agent regarding your auto insurance coverage needs.

References

• State of New Hampshire Insurance Department (NHID): Your Guide to Understanding Auto Insurance in the Granite State
• Attorney General of Massachusetts: Understanding Auto Insurance
• Oklahoma Insurance Department: Commissioner's Corner: Understanding Your Auto Insurance Policy
• Super Auto Insurance: Understanding Automobile Insurance