Some form of insurance is required for all drivers – and for good reason. The road can be a dangerous place, so financial protection in the event of an accident is critical. However, many people often find themselves puzzled by the fluctuations in their insurance premiums. Understanding what drives these changes in car insurance rates can help you manage your insurance costs more effectively and avoid any unpleasant surprises.
What Influences Our Car Insurance Rates?
There are several elements that tie into the total cost of your insurance rate, and some may surprise you. “Key contributing factors related to car insurance rates are the age of the driver, their driving history — including any at-fault accidents or moving violations within the last three to five years, the type or size of the vehicle, the amount of miles the vehicle is driven on an annual basis and how the vehicle is being used,” said agent Casey Hahn of Florida Farm Bureau Insurance.
As Hahn mentioned, age is a major component that impacts your premium. Younger drivers, particularly those under 25, typically face higher insurance rates. This is because they are statistically more likely to be involved in an auto accident. According to a 2021 study from the National Highway Traffic Safety Administration, drivers between the ages of 16 and 24, despite only making up approximately 11% of all licensed drivers, accounted for about 23% of all motor vehicle accidents. Additional research conducted by the Journal of Safety Research suggests that “teen drivers do not always realize the consequences of their actions because areas of the brain responsible for making well-grounded decisions and judgments are not fully developed until about age 25.”
Keeping Costs to a Minimum
Everyone is a fan of a good deal. There may not be a simple trick or life hack to immediately reduce our car insurance premiums. However, there are some factors to keep in mind to find the best rate for you. “Multi-vehicle discounts, multi-policy discounts, a clean driving record, a good student discount and longevity discounts by sticking with the same carrier are a handful of the ways insureds can help lower their auto insurance costs,” Hahn said.
Good student discounts, in particular, are a savvy way parents and young adults can reduce their car insurance rates. Personally, I was able to lower my premium as a student by working hard and maintaining a high GPA. All that was needed was proof of my academic record — so be sure to save those transcripts!
Look to an Agent for Assistance
With the number of moving parts that affect car insurance premiums, the entire process can feel overwhelming at times. That is why it is so important to consult an insurance agent for any outstanding questions or concerns you have about your policy to make sure you find the unique plan that is best for you.
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