Car Insurance Costs

June 23, 2017
It's a fact of life. If you own a vehicle, you have to have auto insurance. Whether you have full coverage or liability insurance depends on the vehicle's value and whether or not there is a loan. In some states, vehicles that are paid off can be insured for liability only, if the driver prefers. Shopping for and buying insurance can be challenging. Many drivers are confused about insurance rates and premiums, especially when it comes to why some cars are more expensive to insure than others. It seems as if there would be one price for the same type of coverage, but that is rarely the case. Insurance companies have several factors to look at when determining the cost of insurance.

Car Insurance by Car

Type of Car

One of the first things evaluated when an insurance company is deciding on the cost of a plan is the type of car to be insured. Insurance companies factor in the car's make and model. For example, two sedans of the same year with different makes and models are unlikely to have the same insurance prices. A luxury sedan, such as a high end Saab or Mercedes, will cost more than a four door sedan model like a Toyota Camry. The same theory applies to other vehicle types as well including trucks, SUVs, and hybrid cars. The cost of an insurance plan typically comes down to the car's value. The more expensive the car, the higher the insurance costs will be. In addition to the car's estimated worth, factors like its age are considered as well. A new car will cost a great deal more to insure than a used model, even if it is the same make and model.

Vehicle Risks

Some, though not all insurance companies, also factor in the risks associated with specific vehicles. Risks, meaning known problems with the vehicle. Some vehicles are known to have model-specific problems, such as faulty transmissions or commonly poor braking systems. Those cars always receive higher insurance premium rates than what are perceived to be better made cars. Vehicles with low standard safety equipment are often given higher premiums, as well vehicles with certain features, like a convertible top. The insurance companies see these vehicles as a liability because personal injury is more likely to occur in the event of an accident, costing the insurance more money on claims that wouldn't have occurred in a safer car.

Vehicle Location

Another reason some cars are more expensive to insure than others is location. Overall, determining car insurance by car sometimes means evaluating where the car will be stored and driven. Drivers who live in heavily populated areas or places known for high crime often find themselves paying more than their suburban or rural neighbors. Some insurance companies take into account the likelihood of accidents, thefts, and even vandalism when determining how much to charge for coverage. Vehicles located in less populated areas are thought to be safer and therefore less of a risk to the company.

Car Usage

Believe it or not, the same car can be more expensive to insure just because its owner drives it more often. People who are planning to drive their car daily on long commutes or to call on clients or other work related tasks can expect to have higher premiums than the driver who uses the car for Sunday drives. Again, it comes down to a matter of exposure. The more a vehicle is on the road; the more likely it is to be involved in an accident or sustain damages, in the eyes of the auto insurance companies.

Why Some Drivers are More Expensive to Insure than Other

The Age Factor

Almost everyone is aware that insurance premiums are determined using other sources besides the car's make, model, and year. Driver age is a major determining factor. Drivers under the age of 25, especially males, are subject to higher rates than women and older males. Unmarried men also face slightly higher premiums as well. The insurance companies' data show that unmarried men are less responsible than those with wives or partners. In many cases, getting married often reduces the insurance premium, even for men under 25.

Check Your Credit

As you would expect, with a good credit rating, the cost of insurance is typically lower. Experts suggest checking your credit score annually. If you notice a change for the better, it might be time to call your insurance company and request an improved premium.

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This is such a great post! I am always looking for insurance information to make sure I am getting a good deal. My sister has car insurance from Estrella Insurance and they have a ton of information on their site about lowing car insurance rates.