Sometimes, when people’s lifestyle or location changes, they are surprised to find out that their insurance rates change, too. This is true with car insurance since insurance companies use many factors to price auto insurance policies correctly. Knowing what some of these factors are, and why they matter to insurers, can help you better understand rate changes, if they do occur.
Below are three things – among others – that can cause an auto insurance policy to rise or fall in price.
Not surprisingly, different types of cars cost differing amounts to insure. A vehicle that has more safety features than others will often result in fewer and less severe physical injury claims and, therefore, require less medical care. These features might also mean these drivers have fewer accidents because the safety features might help prevent them. If you are thinking of getting a new vehicle, it’s helpful to call your trusted advisor at Tompkins Insurance first to find out how that car model will impact your current rate.
Change of location
Even if you just move to a new house or apartment a block away, you will need to let your insurer know that your address has changed – and you may see a jump or fall in your premiums. Zip codes are one factor insurance companies use to set rates. The claims within each zip code might vary and have a different number of auto accidents, thefts, vandalism, fraud, orother issues impacting claims. If the chance of filing a claim increases in your new area, so might your auto insurance premium.
New driver added onto the policy
Adding someone to your auto insurance policy will also affect the rates. If the new person on the policy is a teen driver, some parents are surprised to see their monthly premiums increase. This is because teens in their first six months of driving independently have more crashes than in their next year of driving. As teens gain experience, they typically have fewer accidents. Still, teenagers are an expensive group of drivers to insure, so premiums often increase if you add your child to your policy.