Your Driving History
What determines how much you pay in monthly car insurance premiums? No factor is more important than your driving history. Keep reading to learn about how your driving records impacts your auto insurance rates.
How are Insurance Premiums Calculated?
Your auto insurance provider calculates your premiums by comparing you to data collected on other drivers. This process helps determine how much of a risk you pose and therefore how likely you are to file a claim.
Policy providers consider statistics like how much it would cost to replace or repair the vehicle you want to insure. They also consider various aspects of your background to get a more accurate picture of you as a driver. These factors include any prior insurance settlement claims, your credit score, and driving history.
How Driving History Affects Your Car Insurance Rates
Auto insurers tend to believe people with a history of poor driving will continue their bad habits in the future. You're likely to pay a surcharge or premium increase for your auto insurance if your driving history includes:
- The nature and severity of each incident will affect how your rates are raised.
- Traffic infraction.
- Moving violations (this includes DUI).
- High point totals.
Driving Histories and Auto Insurance Eligibility
Car insurance companies DO NOT have to provide you with coverage. After evaluating your driving history, if a carrier thinks that you're too dangerous to work with, they may rescind your policy in accordance with their termination clauses.
However, having your auto insurance canceled doesn't mean you can just drive without coverage - it's illegal to drive without insurance (in most states), so you'll need to find a new provider immediately.
Although this isn't an optimal situation, it does give you a chance to shop around for a better policy. No two companies are guaranteed to charge you the same premiums for the same driving record, so take advantage of the opportunity to get a fresh perspective.
Improve Your Situation
Even with a poor driving record, you have various options for paying less. Consider the following:
- Seek out an insurer that offers nonstandard policies, which are adjustable on your terms.
- Raise your deductible, which will lower your premiums.
- Take a defensive driving class.
- Investigate whether you're eligible for a state-mandated low-cost automobile insurance plan.
- Research all other auto insurance discounts you may qualify for.
You driving record is one of the biggest factors determining you car insurance premiums. Though, a history of accidents or violations doesn't mean that you can't save money. Browsing various policies and getting a range of quotes could help reduce your financial burden and still satisfy your state's legal car insurance requirements.