Most people are aware that certain things influence an insurance premium. Where you live can have a huge impact on the rates you pay for accident coverage. Therefore, it is important to understand the different factors involved.
When setting up a policy, different factors are used by insurance companies to determine premium. One of these is the location where you live, which entails numerous sub-factors. The reason is that according to studies and compiled statistics, accidents are more prevalent in certain parts of the country.
Key Factors of Where You Live
Some of the primary things that can have a big impact on accident rates include:
- Weather – If you drive in a part of the country where there is a lot of rain, snow, or sleet, the risk of an accident increases. Even if you are an excellent driver, compared to other regions within the country, there is a greater potential for having one or more accidents in a state with harsh weather.
- Road Conditions – Another factor has to do with the condition of roads. Things like bumps, potholes, and poorly maintained traffic lights and road signs are all factors of accidents. For each of these, you might swerve to avoid an object or another driver that did not yield at a sign, only to be in an accident.
- Density of Population – Obviously, the more populated the place you live, the greater number of drivers on the road. Therefore, it makes sense that the risk of having an accident increases in areas that are densely populated. In addition to risks of vehicle-on-vehicle accidents, there is a greater risk for pedestrian accidents.
Unchangeable versus Changeable Factors
Regardless of how many insurance companies you talk to, they all follow the same rules when it comes to unchangeable versus changeable insurance factors. Using these factors is how insurance companies determine premiums, as they indicate the likelihood of accidents and other incidents. As you will see from the list below, some factors you have no control over while others you do.
- Unchangeable Factors
- Age – Drivers under the age of 25 pay more for insurance coverage because they are more likely to get in a crash.
- Gender – At this time, gender is not a major factor.
- Marital Status – If you are married, your premium will be lower than if single.
- Changeable Factors
- Location – If your insurance premium is too steep for where you live, you may need to consider moving. For instance, if you live in a big city, perhaps a rural location would be better, or if you are in an area with relatively high crime, find a safer neighborhood.
- Driving Record – The more moving violations you get, the higher your rate will go. People with many moving violations are more likely to get in an accident than those with a clean driving record.
- Vehicle – Certain types of vehicles have higher rates than others do.
- Claims – If there are no claims against you from an accident, rates will be more affordable.
- Credit Score – Insurance companies now use a person’s credit score when determining policy premium. If your credit score is less than perfect, this would be a great time to clean things up.
- Driving Pattern – High-mileage driving will have an impact on accident rates, so high-mileage drivers, such as limousine and semi drivers, pay higher premiums than people who do not spend as much time on the road.
- Anti-Theft Devices – Installing an automobile alarm system or some other type of anti-theft deterrent will help lower the amount of insurance premium paid.
- Vehicle Age – Because newer vehicles are more expensive, they are considered a higher risk. As such, the age of your vehicle will also have an impact on rates.