One of the most common reasons for expensive car insurance is due to having several accidents on your driving record—but, that’s not always the case. Even if you have an accident-free driving record, there are still other reasons as to why you can’t seem to find a lower car insurance rate. It could be the fact that the model of your vehicle is considered a high risk for accidents. Or, perhaps you live in a city with a big population and a greater chance of a collison. In this article, we break down all of the possible reasons that you could have sky high car insurance, despite having a good driving history. More importantly, we discuss the steps that you can take to lower your car insurance and save money.
What We'll Cover
- Why Is My Car Insurance High if I Haven’t Had Any Accidents?
- Important Factors That Determine The Price of Car Insurance
- Car Insurance Rates by Age Group: Who Pays the Most?
- If You Live in These 10 States, You Could Pay More for Car Insurance
- How to Save Money on Car Insurance
- Final Thoughts: Your Solution to High Insurance
Why Is My Car Insurance High if I Haven’t Had Any Accidents?
In order to try to lower your car insurance rate, you must first learn what are the important factors that car insurance providers consider when determining your rate. While you may have control over some of these factors—like your vehicle model and your driving record—other factors are less easy to control, if not impossible. For instance, you can’t control your age, but it is one of the most important factors that goes into calculating the price of your car insurance. Still, any of these factors could be the reason that you pay more or less for your car insurance. Below, we’ve explained six factors that you should learn about. It’s possible that your insurance provider considers more, but these factors are the most common: driving record, credit history, vehicle, insurance coverage, age (demographics), and state.
Important Factors That Determine The Price of Car Insurance
- Driving record: Although you may have not been involved in an accident before, your driving record also consists of speeding tickets, parking violations, and more. Insurance providers will also inquire about your driving patterns. If you have a long commute to work, put a lot of miles on your vehicle, and drive on the highway frequently, you may be subject to a higher car insurance rate.
- Credit history: Put simply, if you have a low credit score, your insurance provider might charge you a higher rate for car insurance. Increasing your credit score is a great way to save money on your car insurance.
- Vehicle: Insurance providers consider some vehicles higher risks than others. If you drive a sports car, a luxury vehicle, or an older model in general, you may have to pay a higher insurance rate. If you’re looking to spend less on car insurance, you should look into a more economical vehicle.
- Insurance coverage: The state that you live in determines the minimum amount of coverage that you must have on your car insurance policy in order to drive legally. If your state requires a lot of coverage—or if you prefer to have more coverage in order to be prepared for emergencies—it will affect the price of your car insurance. Extra coverage that can increase the price of car insurance include umbrella coverage and loan/gap coverage.
- Age: Your age and other demographics, such as marital status, affects your car insurance rate. If you are younger, you probably have less driving experience and are more likely to get into a car accident, versus somebody in their 40s. On the other hand, if you are in your 70s, you may also see a spike in your car insurance rate. Below, we go into detail about what age groups typically pay the most in car insurance.
- Location: When seeking cheap car insurance, you should always go by your zip code. This is because the state and city that you live in plays a big role in determining how much money you will spend on your car insurance. Below, we show the top 10 states with the highest annual average spending on car insurance.
Car Insurance Rates by Age Group: Who Pays the Most?
As mentioned above, age is one of the most important factors that goes into the price of car insurance—mostly because it is tied to driving experience and the likelihood of having to make a claim. But what age group typically pays the most? The answer is teenagers and young adults. Despite having a clean driving record with no accidents, drivers under the age of 25 are the most expensive group of people to insure on a car insurance policy. Having a teenager on your plan will increase your car insurance premium, especially. Typically, as long as you maintain a good driving record, your car insurance premium will decrease the older you get—until you reach your 70s. People aged 50 through 70 typically pay the least amount of money on car insurance, compared to any other age group.
If You Live in These 10 States, You Could Pay More for Car Insurance
The price of insurance varies state to state. In fact, the best way to estimate how much you will have to pay in car insurance is best determined by your zip code. Because all states have their own laws regarding what car insurance must cover, car insurance is much higher in certain states versus others. This, plus the factors that we discussed above, could be the reason that you are paying sky high insurance prices, despite having an accident-free driving record. In the table below, you can see which 10 states have the highest average annual spending on car insurance. If you live in one of these states, you may find that your premiums are a little bit higher than usual. The state that pays the most annually on car insurance is Michigan, at $2,864. In second place is Louisiana, at $2,412. Later in this article, we discuss steps that you can take to lower your car insurance rate and save money.
|State||Average Annual Spending on Car Insurance|
Source: Insurance Panda
How to Save Money on Car Insurance
With the right tools and strategies, you can save a lot of money on car insurance. When shopping around for car insurance, the first thing that you want to look for is discounts. Whether you’ve been in an accident or not, these discounts will help you lower the cost of your auto insurance rate. Most insurance providers provide a comprehensive list of discounts that you may qualify for, including discounts on insuring a teenage driver, being a teacher, and bundling your home and auto insurance. Some insurance providers, like GEICO, even provide discounts if you are a member of an organization.
The second thing you want to look into is using an insurance comparison website that will provide a list of the best and cheaper insurance providers based on your location. In fact, you can use the form below to get started today. All you have to do is enter your zip code, and you will be directed to BestInsurer. This website will serve as your resource for finding the best deals on car insurance in your area.
Final Thoughts: Your Solution to High Insurance
Despite never having been in an accident, it’s possible that you still have a sky high car insurance rate. This is because accidents are not the only factor that goes into consideration when insurance providers provide you a quote on car insurance. Factors such as age, location, type of vehicle, and coverage all come into play—and any one of these factors could be the reason that your car insurance is expensive. Although you can’t change some of these factors, there are ways to lower your car insurance. The solution to high insurance is to shop around and use comparison tools to see prices from multiple providers.