When you apply for a loan to purchase a new automobile, you probably have all of your financial documents, including income statements and credit report, ready to go to make the process run smoother. These same items are necessary when purchasing auto insurance. Beyond your financial records, an insurance agent will look at a number of other pieces of personal information to determine what type of coverage you can get and how much you will pay for a policy. Here are some of the additional factors that play a role in your auto insurance rate:
It may seem obvious that your driving profile plays a part in your coverage, but you may not be aware of what exactly agents look for. The number of miles you drive in a given day or week will matter greatly, as agents will need to increase your coverage if you are constantly on the go. Insurance providers may determine that you are at a higher risk of getting into an accident if you drive more miles. Conversely, if you rarely drive, you are a lower risk and will likely need to pay less for coverage.
The number of times you have been pulled over, ticketed or involved in an accident will also be a component that insurance agents will use in order to determine your level of risk.
Type of car
When picking your next car, consider getting something on the sensible side. While a fancy sports car can be a great piece of eye candy in your driveway, you will likely see higher insurance rates come with it. Getting a car that is known for being safe can help you cut down your insurance costs.
Insurance companies put a lot of stock in your personal life. Where you live, your age and occupation can all help them determine your insurance risk and what you are going to eventually pay for coverage. If you have a job that requires you to commute a great distance, your premiums will be a bit more expensive because you are at a greater risk of getting into an accident. Companies will also look at the area in which you live. If your neighborhood has a history of accidents or car thefts, expect your rates to go up.
Some companies will also look at your credit score, as it can be an accurate assessment of your financial responsibility. While this is a common practice, Edmunds.com said that some states are starting to ban this process. This could help buyers who have a lower credit score get a better insurance rate.