Six Unexpected Reasons Why your Car Insurance Premiums are High

It’s not surprising that a less-than-perfect driving record or driving a luxury sports car will result in a high insurance premium. However, there are a number of factors which can influence insurance rates. Insurance companies can get really nit-picky when it comes to assessing risk, which is why quotes can vary drastically between firms. One insurance company may place a high statistical value on living in a neighbourhood with a low incidence of accidents, while another may focus on your parking situation. If you’ve received quotes that are higher than you like, the following are a few surprising reasons why this may be the case.

1. You live in the wrong zip code.

Two drivers with clean driving records and the same make and model of car may pay vastly different rates, simply because they live in different locations. In some cases, moving to a different zip code only a few miles away can reduce your rates significantly. Rural areas with little traffic tend to incur lower rates, as areas with high traffic are the scene of more accidents. If you’re confused about how location impacts your premium, it’s worth looking at online comparison tools and enter in a few neighbouring zip codes to see how they measure up.

2. You drive a car with high horsepower.

Naturally, a Porsche will cost more to insure than a Ford Focus. However, in addition to the make of car you drive, its engine power also impacts insurance rates. A four-cylinder car will generally cost less to insure than a six-cylinder car. You can compare the engine speeds and specs of various models using tools like www.carsales.com.au to find a model that’s cheaper to insure. The results may surprise you!

3. You have a low credit score.

It makes sense that a lower credit rating would lead to higher interest rates in terms of car financing, but did you know that this also has a bearing on your insurance premiums? Statistically, people with low credit scores are more likely to get into accidents than those with high scores. As a result, insurance companies tend to weigh this factor into their premiums.

4. You have a high risk occupation.

Your education and job also can impact your insurance rates. If you work in an industry that’s associated with a higher statistical risk of collision, such as those involving long hours on the road, this will result in higher fees. Blue collar workers and those that work swing or night shifts tend to pay more.

5. You are single, divorced, or have children.

Drivers who are single, divorced, or separated may see a slight increase in their insurance rates, as will those who have children. However, not all insurance companies weigh this factor into their assessment.

6. You park your car on the driveway or street.

Cars that are locked up in a garage at night are less likely to be damaged by the elements, vandalized, or stolen. As a result this leads to lower insurance rates than those that are parked only a few feet away on the driveway.

When it comes to insurance rates, it’s the small things that matter. It’s also important to remember that every insurance company uses a different, unique formula to assess risk. This is why it’s best to compare quotes from several different providers in order to find the one that’s most favourable to your personal circumstances.

7 thoughts on “Six Unexpected Reasons Why your Car Insurance Premiums are High

  1. We surprisingly have very cheap car insurance, and I’m still not sure why. Whenever I tell someone that we only pay $50 for full coverage on our brand new 2SS, they tend to think we are lying. I even thought it was wrong so I called the insurance company and asked if it was wrong!

  2. My insurance has slowly dropped with age. Last year they offered me a three year price lock and fortunately in that time prices shot up in the UK. Having done my research I’m £200 better off in my deal.

  3. My wife and I have cheap insurance since we are both over 25, clean driving history and I am in the military, but this list is really interesting. I actually didn’t realize that your credit score could have an effect on insurance premiums. Right after I typed that, I just looked up and saw Brock’s comment…so apparently you are informing the masses! lol

  4. I think I have shopped a good deal on insurance, but I’m never really sure because I don’t really go around asking people what they pay. Most of the factors you listed work in my favor except I don’t have a garage to park my car. I pay $38/month for my old 4cyl car plus my ’03 motorcycle 🙂

  5. When I moved from the Coastal mountains to living in a big-city suburb, my auto insurance rate went up. I shopped around and was able to bring the cost back down. I check insurance prices now about once every three years.

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