3 Ways Lifestyle Affects Your Car Insurance Payments


Your Car Insurance Payments Change Based On Your Lifestyle

Car insurance is in many ways similar to any other type of insurance. You want to make sure you get enough quotes from different insurance companies to find the right policy at the right price. Like home or health insurance, car insurance is also subject to state laws, so prices can vary as a person moves from state to state. The higher your deductible, the lower your monthly payments. Just make sure you have enough money scrounged away to pay the deductible, otherwise you won’t benefit from saving each month. Despite the similarities to other insurance policies, however, car insurance does have some unique elements that can raise or lower the cost of premiums for drivers. Here are the top three factors that go into your car insurance costs. SEE ALSO: How Gender And Age Affects Car Insurance Rates

1. Personal Factors

Because driving is more active than, for example, home ownership, one way insurance companies try to evaluate your risk levels is by analyzing your behavior patterns through personal and demographic information. Categories include:
  • Age/Sex/Marital status: If you are under 25, male or single, you are probably paying more than someone who is not.
  • Driving Record: One of the best ways to keep insurance costs down is to maintain a clean driving record. Almost any moving violation will increase the cost of your insurance.
  • Credit History: When you buy insurance, you are entering into a financial agreement; your financial history is important. As credit reports are the most standard measuring stick for financial responsibility, insurance agents use these as part of their formula.

2. Your Car

The type of car you own and its features will probably have the biggest impact on the amount of your premiums. The factors insurers consider are:
  • Price: Expensive cars will usually cost more to cover, simply because they are more expensive to repair or replace. But, if a car is so cheap that it is unsafe to drive or particularly easy to steal, your agent will take this into account when calculating your premiums.
  • Safety Features: Anti-lock brakes, power steering, air bags or anything that makes a car more safe can lower your costs. Having a car alarm will let your agent know you are protected against theft and vandalism, as well as accidents.

3. Lifestyle

How and where you live can have a big impact on insurance prices, too. Changing the following things could save you considerable money:
  • Drive less: A short commute to work or frequent use of public transportation could qualify you for various savings.
  • Home address: Picking up and moving just to save money on your car insurance is probably not practical, but if you are moving anyway you should check to see what the price differences are by address. Premiums can vary by city, state and zip code.
  • Payments: Altering the way you pay your insurance can save you a couple dollars a month; money that adds up, if you consider all the years you will be driving. Look into auto-paying and paperless billing. If you can afford to pre-pay instead of go month to month, you will also save yourself some money. 
SEE ALSO: 3 Tips For Finding The Best Auto Insurance

Special Discounts

As with any insurance policy, you’ll need to ask about additional discounts and incentives that might be available for you. Ask specifically about professional organizations and auto clubs, loyalty programs, good student discounts for teenagers and bundling with other policies.
Date of original publication:
Updated on: November 10, 2015

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