For car owners, having auto insurance is very important. In our post “Benefits of Auto Insurance,” we underline that auto insurance protects you in case an accident occurs. With it, you can reclaim the costs of repairs and it covers you in case you damage anything your end.
However, car insurance rates are increasing exponentially. MishTalk’s statistical report on car insurance costs over the years shows that since 2021, car insurance prices have increased by 1.3%. The same source adds that, among other factors, rising crime rates could be influential in driving car insurance costs higher.
If you’re looking into availing auto insurance, you must consider things carefully so it’s worth every penny. Here are some questions you can ask yourself before buying auto insurance.
What is your gender?
Your gender affects how much your auto insurance will cost–and for good reason. Sound Dollar explains that car insurance costs vary per gender because, statistically, road accidents are more likely to involve men than women. Should a woman be involved in an accident, it usually results in only minor damages. Additionally, statistics on men driving under the influence are significantly higher than women. Therefore, insurance companies tend to set lower insurance rates for women car owners.
What kind of car do you own?
Insurance agencies set higher premiums for owners of high-end or luxury cars. On the other hand, simpler and more inexpensive cars are much more affordable to insure. NextAdvisor recommends purchasing medium-sized SUVs or minivans which are cheap to repair, have anti-theft features, and are less likely to cause immense damage to other vehicles. You can look up models on the Insurance Institute for Highway Safety’s website to confirm how safe a particular design is. As for electric vehicle owners, whose insurance rates are significantly higher than diesel car owners’, California offers a $4,500 rebate to help ease expenses.
Where is your area of residence?
As previously mentioned, the primary reason insurance costs are rising is the increase in carjacking incidences. For instance, Los Angeles reported 21,313 stolen vehicles in 2020 alone. Those living in LA find that insurance companies set higher rates for them. Auto insurance costs $2632 per year in LA on average, which is higher than both the statewide average of $1638 per year and the national average of $1548. If it’s not about safety, your area’s average costs for repairs can also affect your insurance rates.
Which state do you reside in?
In some states, it is mandatory to get insurance. The best way to minimize insurance costs in these cases is to only get the minimum coverage. The minimum requirement for Californians includes bodily injury liability insurance covering at least $15,000 per person involved and $30,000 limits for every accident. You will also need property damage liability insurance with a minimum limit of $5,000 per accident.
How are your driving and credit records?
Insurance companies tend to favor car owners with spotless driving records. This is because there is a slight chance that these drivers will get into an accident and file an auto claim. If you’re a new driver with no record yet, your insurance rates will be relatively higher since the agency has no way of knowing how often you will be filing auto claims in the future. Alternatively, insurance agencies can consider your credit score as an indicator that you are less likely to file a claim.
Getting auto insurance–despite its benefits–can seem like a financial challenge in itself. With these questions, you can decide on the most practical way to go about purchasing auto insurance.