Paying too much for auto insurance can cut down your budget for other expenses. However, there are things you can control to reduce your monthly insurance cost. Here are common reasons why people overpay for auto insurance coverage.
Renters tend to pay up to 7 percent more in auto insurance costs than homeowners, based on a 2016 Consumer Federation of America study. Find out from your insurer if they are charging you more just because you're a renter.
Some models simply don't test well in crash studies, particularly new cars with higher safety risks. Your insurer may charge you a higher rate based on tests conducted by the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS).
The more you drive, the more you pay in insurance. This general rule of thumb also applies to distance, especially for daily commutes. All those miles add up to higher risk and higher rates.
Thieves tend to target nice, new cars rather than old models, except for classics. They also like stealing parts from newer models. So the nicer and newer your car is, the higher the probability of paying more for auto insurance.
Bad credit follows a person around in more ways than they may realize. It sends out red flags you might not pay your bills on time. Because of this perceived risk, insurers will probably charge a higher rate.
Cars with high-quality or unique parts can cost more to repair than the average vehicle. Insurance companies view higher repair costs as higher risks to their finances, causing them to increase their rates.
Your address is one of the most important factors that affect your auto insurance. High-crime neighborhoods pose higher risks to the insurer and so they charge higher premiums.
Teenagers are the top age group involved in auto accidents. Adding your teenager to your policy when it's time for driver training can boost your auto insurance rate due to added risks.
Bundling is a marketing technique of combining several types of coverage for a lower rate than paying for each plan separately. Paying for each coverage separately will always be more expensive than getting a bundled policy.
College graduates get breaks on auto insurance costs because they've demonstrated taking responsibility for their education.
These are a few reasons people end up paying more for their auto insurance coverage. Contact us at John E. Peakes Insurance Agency for more information on making your auto insurance more affordable.
