Let’s talk about the nine different things that affect you. For some of those things, you can take preventative action to make sure that you keep your rates lower but then there’s something your just unfortunate, you just can’t control at all.
Your Age.
Unfortunately, age is a big factor. People who are younger typically, are going to have more accidents, specifically, people who are under the age of 25. It’s just statistically, it’s proven that younger inexperienced drivers have more accidents, what you’ll find on your auto insurance is that you will pay the most premium or the most cost. When you’re younger, whenever you’re a teenager up until around the age of 21, 22, or 23, you will see a little bit of reduction. It’s not going to be just like a massive reduction in costs all of a sudden, but you’ll see that it gets a little bit better when you turned 24, 25, and 26. The best rates are typically somewhere around 45 to 50 years of age, that group of people tends to pay less, they are the ones that have the least amount of accidents, the most cautious, the most careful and maybe they don’t drive as much though I’m not really sure about that thing. Once you get over about 65 up to 80, you’ll see that the rates will start creeping back up again because as you get older, unfortunately, your reflexes become slow and your vision becomes less clear.
Your Gender.
You can’t control whether you were born male or female but it has been statistically proven that males have more accidents and violations. You can look at different statistics out there, you can do a Google search and find that depending on which topic you pulled up, you may see that it says women have more accidents. There’s one thing that I saw that says 68% of all accidents are actually women versus men. But that’s a little bit skewed because women, don’t drive nearly as much as men do. So let’s go on to dealing with the accident, it’s a little bit misgiving, because also statistically, men drive about 50% more than women do. The average miles per year per vehicle is about 15,000 miles, the average woman is around about 8,000 and the average man is about 50% more than that, which is about 15,000 or even 18,000. Another thing is that men are proven to have more violations, and inside of the year is almost double the number of violations that men have versus women. Men are also more responsible for more fatality accidents, with 28,000 accidents for men versus 11,000 for women.
Your Credit Score.
Depending on what your FICO score or credit score is, it’s gonna affect your rates. As Dave Ramsey says, FICO is just proving that you worship at the altar of debt, and well, maybe that’s true, maybe that’s not. In reality, there are a lot of things in life that are just based on that FICO score, whatever your opinion is, it is a reality that this is one of the things that will determine how much you pay for car insurance. This is the case in all states except for 2, that’s Oregon and Washington, but in the states that we work in, Louisiana, Mississippi, Arkansas, Texas, and Oklahoma, those states are going to use credit as one of the factors. They’re not actually pulling your credit score, and to look whether you have a 400 or 800, there are other data they pull from that and use that to help determine the number. You may think, ‘what does that have to do with me as a driver?’ Well, the theory is that, because you take care of your money, and because you’ve managed that well, everything else in your life, is also well managed. There’s some reason I think, that money is really kind of one of the harder things to manage and if we’re able to do that other parts of our life will fall into place. That is something you can control, just make sure you pay bills and don’t overextend yourself, if you have poor credit, now, and you are able to fix it, go back and ask your carrier to give you another rewrite based on your credit, to help give you a better rate, because most carriers will do that. If they can’t do it within that carrier and if you have an independent insurance agent like us, we can rerun your quote for you with another company to give you a better rate.
The Place You Live In.
You may or may not control your location, but the reality is, if you live in a really large city, there are a lot more accidents there than there are in rural areas because, in rural areas, there’s not nearly as much traffic. Inside the city, there’s a lot more congestion, a lot more traffic, there are a lot more people with road rage and things like that. There are a lot more opportunities for an accident in the city than in the rural areas. So if you live in a rural area, you’re going to pay less.
Your Driving Record.
There are a couple of different things to consider, one of them is accidents and another thing is actually violations. Both of those are broken up into different groups, let’s talk about accidents first. Accidents are going to be either one it’s going to be at-fault accidents, the second is going to be not-at-fault accidents and the third is going to be like comprehensive incidents. An at-fault accident is where you are proven to be at fault, you got into an auto accident and you cause the damage. Maybe you didn’t do it intentionally, but still, because of your action, this accident happened and so your car insurance is going to pay and you will be charged for that because you are now a higher risk than the average driver. Rates are all based on the averages, they are based on your age, the vehicle, where to live, your credit, and all those other things, they’re basing it off of an average. The second thing is going to be a not-at-fault accident, and it falls on different areas. There’s a little bit of contributory negligence, meaning that you’re a little bit to blame. Sometimes that happens and that may be charged against you but typically, if it’s a true not-at-fault accident, meaning you didn’t cause the claim, but there’s no other insurance to pay for it, so yours has to pay for it. Typically, they don’t charge you for that. The third is gonna be comprehensive like a tree falls on your car, water damage from flooding, or damages caused by lightning, or fires, those are typically not going to be charged against you.
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Violations also fall into different categories of either major or minor. An example of minor violations would be windshield tickets, you’re playing your music too loud, or maybe you didn’t get your car inspected. The next category is in the middle, like speeding, but it’s only like 5 or 10 miles per hour over the speed limit. A major is going to be things like either you had a single car accident, you’re driving at excessive speed, like over 20 miles per hour or 15 miles per hour, depending on the state, that’s going to be considered reckless. Another would be an at-fault accident and DUI or driving under the influence, those are going to be major depending on where you fit in those categories, and it’s going to increase your rate. Also, if you have multiple accidents or tickets, or violations, it’s a good chance that your policy might get canceled.
Your Mileage Matter.
We talked about your men versus women earlier, right? Men drive 50% more than women. Mileage is going to have a lot to do with a lot of companies that give you a discount if you drive under 5000 or 3000 miles per year. If you know that you drive under 5000 miles ask your agent about a discount for that. If you drive more miles, they’re going to charge you more for that because the more miles you drive, the more opportunity there is for an accident, the fewer miles you drive, the less opportunity for an accident.
The Type Of Vehicle You Drive.
If you drive a sports car, you’re gonna pay more and the colors got nothing to do with it. Red cars do not cost more than blue cars, insurance companies focus on performance and power, their ability to withstand an accident, and also how much damage they would do inside of an accident, their size, and how much the car is. The more expensive and bigger your car is, the higher rate you will have to pay.
Your Coverage
Your coverages are the things that you buy, it’s smarter to buy higher liability limits. It will help protect you protect your assets, it’s going to cost you a little bit more, but it’s not going to cost you nearly as much as choosing lower deductibles on your comprehensive and collision. There are other coverages that you can add or remove such as uninsured motorist, med pay, rental, and other things that will affect your premium. Depending on what coverage you need, it’s going to make your premium go either up or down. A good way to save is to have higher deductibles on your comprehension and collisions.
Try Telematics.
Don’t be scared of it. Telematics is either an app that you install on your phone or a little plug-in thing that you put into your car that monitors how you drive now. Don’t be worried about people watching you, monitoring you, getting your data, and selling them because they are not. All the different apps you’ve got on your phone and all that stuff, they’re already following you much more than the insurance company is with the telematics programs, what they’re trying to do is they’re trying to reward you with a better rate. If you are better than the average driver, you deserve a better rate. You are shorting yourself if you don’t try the telematics program and you are a better than average driver, most of them have an opt-out period if you don’t do very well. Here’s a theory, if you install that on your phone, or plug it into your car, you’re going to be aware of it, right? If you’re aware of it aren’t you just naturally going to drive better? Most of them give you an automatic discount just for trying it and then a lot of them will give you a discount of only up to 30% per car. Typically, you get to keep that discount for the life of your policy, as long as you have a vehicle, whether it’s car one or car two, it doesn’t matter as you trade them in, you still get to keep your discount. So give it a try, it’s a great way to help you save money and get the discount that you deserve.
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Thank you,
Beaux Pilgrim, CEO
Beaux Pilgrim
Reed Insurance