Car Insurance Premiums Too High? Here's Why

If you're going to drive a vehicle, it's important that you and your vehicle are properly insured. While there are laws in almost every state requiring a minimum amount of liability insurance, it's also the smart choice. So now you're wondering, How much is car insurance? There are many different factors that determine what your insurance premiums will cost.

Your driving record is usually the first and probably most important consideration. Your premiums are directly related to the amount of risk they perceive they are taking with you, if you have a high risk profile they're going to stick it to you every month. Most companies are coming out with good driver discounts or accident free discounts so the longer you go without tickets or accidents, the more you save.

Next your potential insurer is going to want to know your age. A young driver, whether male or female, will be charged more for insurance coverage because they are a greater risk. Therefore you are bound to pay much higher rates in your youth than you will at age 40 or 50. Most companies will start to give you lower rates when you hit age 25 and they may drop even a bit more as you continue to get older.You'll receive a reduction in your premiums at age 25 and some again at 28. According to statistics the safest age category is from age 45-64 as that group has the least number of accidents.

A third consideration you have to think about is the car you're driving. Not only do sports cars have a higher accident rate but they also can be more expensive to repair. Insurance companies base premiums on historical losses, so if you have an expensive car to fix or a popular theft target there will be higher insurance premiums. Between 1996 and 2009 the number of deaths per 100 million miles driven dropped impressively from 1.73 to 1.13 which has lowered premiums, but at the same time cars are now much more expensive to fix.

In summary, if you are more likely to cause problems and your car is expensive to fix then you will have higher insurance rates. There are of course other factors that will come into play as well, but these are the major ones and you control 2 out of 3 of them. One other item that you will want to consider is getting a copy of your 3 free credit reports that the government guarantees you each year. Your credit score is becoming increasingly important in determining how much of a risk you pose to the insurer, so you want to make sure there are no inaccuracies.