What determines the cost of your automobile insurance?

Automobile insurance is one of those expenses that comes up every single month in your life. And every time you see that bill, every time that money gets drafted from your account, you’re thinking, man, this is too much money. So, I am going to share a few of the things that help set the auto insurance rates that you’re paying.

These are not in any order or priority.

Factor 1 – How many accidents you’ve had?

Are they at-fault accidents or are they not at-fault accidents? Did you hit a deer in the middle of the road? Or was it like a big pile-up on the interstate?

Factor 2 – Do you have any violations and are they major type violations?

It could be that you’ve had a speeding ticket between five and seven miles an hour over which might not hurt you so bad. But maybe you’ve had a super speeder where you’re 20, 25 miles an hour over the speed limit. Super speeders are not so good from an insurance standpoint. In fact, some insurance companies will not even issue a new policy if you have had a serious violation like a super speeder within the past 12 months.

Factor 3 – Where do you live?

Crime is a big factor, and some areas are going to have higher rates than others because of it.

Factor 4 – Your insurance score (aka credit score!)

Your insurance score is something that nobody wants to talk about or think about. The reality is that your insurance score is going to affect your premium. And honestly, it will affect it the most. The insurance score is similar to a credit score. When you get a quote for auto insurance, you’re not getting a full credit report pulled, the same way as if you were applying for a mortgage or a car loan. But, it is going to calculate and determine your ability to pay your premiums and your ability to cover your deductible in the event that you did have a claim.

I can’t express enough how much your insurance score is going to affect what you’re going to pay. You can have two people that live in the same identical house side-by-side and those people drive the same vehicle. Those people have the same violations. They have the same accidents. Let’s say it’s zero. But if the insurance score is different, the same insurance company is going to rate those two people totally different, and the premiums are going to be substantially different from one person to the other.

If you want lower rates, I highly encourage you to clean up your credit. While you at it, make sure you don’t get any violations, make sure that you don’t get in any accidents and live in an area that doesn’t have high crime. And I promise, you will see your car insurance rates be the most competitive that they can be, especially in the market that we’re living in now.

If you have any questions for us or you want to learn more about how the sausage gets made on your auto insurance rates, please give us a call at (478) 922-853, email us at info@hm-advisors.com or fill out a quote request here. We would love to hear from you.

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