We all are looking for affordable car insurance or discount insurance. It’s one of those expenses where we frequently look at our options for cheaper coverage while maintaining quality protection. And while we’re required to have insurance, we still have questions about our insurance policies.
Here are some frequently asked questions regarding auto insurance rates, and the answers to them.
Why are car insurance rates higher for younger drivers?
Even though it might seem like it, insurance companies don’t have a problem with younger drivers. Insurance rates are based on data, not years on the planet. And insurance companies have decades of data they use to track trends and, in turn, calculate rates.
So, what do those trends show? With less experience behind the wheel, younger drivers are more prone to both auto accidents and reckless driving.
Will my rates go up if I’m involved in a not-at-fault accident?
This question has a lot of variables involved, so there is no clear-cut answer. Outcomes can vary by state and by insurance company. Some companies view a not-at-fault accident like a speeding ticket, one more indication that you are more likely to have an at-fault accident.
So, while you might think a not-at-fault incident shouldn’t raise your rates, it can and may be a reason to shop your insurance if it does.
Does where I live affect my insurance rate?
Where you live has a major impact on determining insurance rates. There are two main factors regarding location—population density and cost of living.
In general, the higher the population density, the higher your rates will be due to the increased likelihood of having an auto accident. The more people you have driving around you, the higher the chances of them hitting you or vice versa. Therefore those residing in major metropolitan areas will pay more for auto insurance than those living in rural counties.
The cost of living in an area also impacts the cost of insurance. Insurance pays for doctors, lawyers, body shops, etc. The higher those costs, the higher your insurance will be.
A lot of factors play into the final rate you receive from a car insurance company. If you are informed of the process, you’ll be better able to understand where the money is going and that helps you stay protected on the road.