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Address: 5488 E State Rd 46 Bloomington, IN. 47401
Phone: (812) 337-7637
Hours: Mon. ~ Fri. 8am - 5pm
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Aug 27th, 2020

10 Surprising factors That Can Affect Your Car Insurance Premiums

White German Shepherd Kya going for ride We may think we know what factors are used to calculate our auto insurance. Do we have a history of speeding or accidents? Our age and where we live are pretty large factors. Young, inexperienced drivers are more likely to be involved in an accident. The age and type of vehicle you drive are huge factors. Is it a two-door sports car or a minivan? Does it have all the newest safety features? Most of these seem fairly obvious, but did you know your job can affect your insurance premium? What about your credit score? Did you know your previous insurance carrier can affect the rates of your new insurance carrier? I'm going to talk about some factors that you may not have considered and some ways to lower your premium.


1. When did you get your driver's license?

You won't be able to change this, but it's something to think about if you have a child. Some kids put off getting their driver's license. My son and daughter didn't get theirs until they were 17. On every car insurance application is a question that asks at what age did you get your license. This question is used to calculate driving experience. Maybe you've heard that car insurance rates decrease when you turn 25. This is because you've been driving for nearly a decade at 25 (counting your learning permit). If you put off getting your license until you're 18 or 20, you won't have the same driving experience at 25, so don't expect a break in the premium.

2. How much you drive

Low-mileage drivers often get less expensive premiums. If you drive less, you should pay less. Less time on the road means less opportunity for an accident.

When you take out your policy, your agent will ask you how many miles you drive. This question is one that is used to determine your premium. If you find yourself working at home now and driving much less, contact your agent. Your agent may be able to save you money by updating your annual mileage. Be prepared to share your odometer readings, some companies will want to keep track of your actual mileage driven.

3. Home Ownership

Some companies give homeowners a price break on car insurance, even if you don’t buy homeowners coverage through the same insurer. Many offer discounts if you bundle multiple policies, such as homeowners and auto insurance, with the same company.

There are some companies that will give you a bigger discount if you bundle home, auto and umbrella policies together. My personal experience with this was amazing. I had my home and auto with USAA for many years. Like most people with USAA, I thought they couldn't be touched on price. I recently switched to West Bend. I was able to increase my coverages on my home and auto, add a vehicle and driver and take out a million dollar umbrella policy all while saving hundreds of dollars per year.

4. Where you park

Keeping your car in a garage is less risky than parking it on the street, and your insurance rates may reflect this, according to the Insurance Information Institute.

5. Your Education

Have you ever wondered why some auto insurance companies ask you what level of schooling you've completed? Drivers with college degrees generally pay less for car insurance. Insurers say highly educated people tend to file fewer claims. However, using education levels in setting prices has come under fire in recent years, and some states are moving away from allowing this practice.

6. Your Insurance Score

Insurance companies call it an insurance score, but it's based on your credit score. Running this score does not give the insurance agent access to your credit history or credit report and it does not count as a hard inquiry on your report. They simply get an insurance score back. Insurance companies use the insurance score to predict if you will pay your bills on time or if you will file expensive claims. According to the Insurance Information Institute, statistics show that people with poor credit tend to file more claims and more expensive claims. A low insurance score could cost you twice as much in premiums.

7. Your Job

I'm not talking about delivery jobs or Uber drivers. Those jobs require special insurance endorsements. I'm talking about a normal job that requires more time in the car could mean higher rates. And a shorter commute will help you save on car insurance. Jobs involving late night or long hours could make you more likely to get in an accident, and having accidents on your driving record leads to higher insurance rates. Drivers with jobs with these requirements are more likely to file insurance claims.

8. Your Previous Insurance Company

If you are coming from a nonstandard insurer, one that mainly covers high-risk drivers, insurance companies may assume you pose a greater risk. If you are coming from a non-standard company, expect to pay higher premiums for 12 months. High-risk does not just mean accident-prone. You could get put with a non-standard company because of your credit score or because you didn't have previous insurance. A lot of companies offer both standard and non-standard policies. If you are with a non-standard company, find out why. Then do your best to improve your driving record or improve your credit score to get with a standard or preferred company to get the lowest rates.

9. Your Current Insurance Company

Insurance premiums vary greatly from one insurance company to the next. These rates vary for a number of reasons. If a company has a lot of claims, they may raise the rates on everyone to offset their losses. This is why it's very important to use an independent insurance agent. We can shop your insurance with multiple companies to find the best fit for your situation.

10. Loyalty

You probably read that heading and assumed I'm going to tell you to be loyal to your insurance company. Get ready for the unexpected. You would think the longer you stay with a company the lower your rates would be. This just may not be the case. Many companies reward their most loyal customers with incentives, discounts and freebies. But in car insurance, the opposite can actually happen. A driver can be punished with a higher premium just for being loyal to the company. Some insurance companies see loyalty programs as a price optimization practice. For example, price optimization entails an insurer offering a longtime customer a 10% discount for their loyalty while raising their rates by 30%. In this case, the discount from the loyalty program hides a net rate increase. This methodology stems from an algorithm used to measure customers' sensitivity to price changes. Companies believe the longer you’ve been with an insurer, the less likely you are to shop around. Loyalty to an insurance company is misplaced and could be costing you money. Your loyalty should be with your independent agent who is willing to look at multiple companies to always keep you with the best carrier for your situation.

About Us
We are an independent agency providing for all your insurance needs in one place. Our personnel brings over 84 years of combined experience to help you improve your insurance situations and fulfill your needs.
We are a member of the PROES Business Group. This association is a family of companies providing multiple avenues to make your life better. It brings business partners with the right background, experience and expertise to help you with your needs.
Each agent, servicing representative and owner’s philosophy is to combine quality, price, experience and service in every facet of your insurance purchasing experience. We strive to build long term relationships by meeting the needs of our clients.
The various backgrounds of our people help assure we can relate to your situation. Our goal is to help you have the right coverage, at the right price and be satisfied at the most important time – when you have a claim. We understand you are not buying insurance: you are buying piece of mind to protect yourself, your business and your family.