Friday, 22 March 2013

Variables affecting your auto insurance – part 2 of 2

In our last post, we looked at a handful of factors that affect your auto insurance rates, in order to understand how those effects take place. Today, we'll continue our examination by looking at a few more factors:

Your job: The job you work in actually has bearing on your likelihood of being involved in a collision. Why? Because it determines (A) how much time you will be spending on the road as a result of your work, and (B) when you are most likely to be on the road. Jobs that require you to drive among multiple locations throughout your work day present more of a risk of collision than office jobs where you stay in the same building the entire day. Additionally, your occupation will have certain hours of the day associated with it. If these hours require you to be on the road at the busiest times of day (ie when accidents are most likely to take place) you can expect this to drive (pun intended) your premiums up.

Your credit: This one comes as a surprise to many people, because it's hard to see, at first glance, how credit history could affect your driving behaviours. Nevertheless, the research indicates that there is definitely a correlation between poor credit history, and a propensity for accidents (even if the relationship between the two is a debated matter). This means that an individual with bad credit may be paying anywhere from 20% to 50% more on their insurance premiums than someone with a good credit history.

Your driving history: On the whole the past is generally a very good indicator of the future. Drivers with a high-risk history are likely to have a high-risk future, and their auto insurance premiums are higher accordingly. Specifically, factors like past collisions you have been involved in, as well as tickets you have received for various infractions, will determine just how much more of a risk you carry than the average driver.

The car you drive: Yes, the make, model, and year of your vehicle affect your rates. This is definitely something to take into consideration when purchasing an automobile. The auto insurance industry relies on research that analyzes every available vehicle on the market in areas such as: purchasing price, safety, rate of accidents, and so forth. The higher a specific vehicle scores in safety ratings (and the lower its rate of accidents) the lower the insurance premium will be for that car. Conversely, the higher the purchasing cost of the vehicle (which will subsequently result in it costing more to repair), the higher the insurance premium will be for that vehicle.