When you call your car insurance agent, they will likely ask you quite a few questions about your vehicle, driving record, age, location and other personal data. This will help them gather information about you to determine how much to charge you for your policy. They must make this determination because the more likely you are to have a wreck, the more of a cost risk you are to your insurer. Let’s take a closer look at why some of the answers you give might influence your premiums.
Your Vehicle Type and Age
Once you provide your vehicle information number (VIN) to the insurer, they can check to see the age, make/model and often a rough odometer reading. Newer vehicles are usually much more valuable than older models. This will make them costlier to insure. Plus, if you finance your car, then your lender might require you to buy extra coverage.
Your Location
Your insurer will likely ask you the address where you park the vehicle most of the time. This will help them determine the relative safety of the roadways in your area. They can better determine your risk of wrecks, vehicle theft and other hazards.
The Driver's Age
Both younger and older drivers might pay higher average rates. Young drivers often pay more because they don’t have the experience to make them the safest drivers. Older drivers might also see their rates rise if they still drive a lot. However, older drivers who drive little might not pay as much.
Credit Scores
Your credit score can help an insurer gauge whether you will pay your premiums on time. They can also measure your overall financial health. Usually, if you have a higher credit score, you will pay less. Better credit demonstrates better trust.
Odometer Stats
The more time you spend on the road, the more likely you are to have a car wreck. By asking your for your odometer reading, your insurer can often gauge how heavily you use your car. If you have a low annual mileage, then you might save on rates.
Your Driving Record
Your insurer will likely collect your driving record to check for past infractions. Statistics show that if you have received tickets in the past, then you might be likely to do so again. Therefore, your insurer might charge you more for your policy. The more you do to be a safer driver, the more you might be able to save.
Your Insurance History
If you have a lot of previous claims on your car insurance, then your insurer will likely have to charge you more. The evidence that you have to make a lot of claims means that you are a higher risk to the company that provides a policy.
Also, if you have ever not carried car insurance, then your premiums might rise also. Most people must have coverage for as long as they own vehicles. If you have ever let coverage lapse on your vehicle, you might have to pay more for getting coverage again.