How Car Insurance Rates Are Calculated For High-Risk Drivers
The prospect of shopping for car insurance likely doesn’t inspire most people to throw open their wallets in glee, but it remains an important decision for all drivers.
There are now more than 268 million registered vehicles on the roads in the United States. In 2016, there were approximately 5 million car crashes that involved property damage, according to Statista.
So while most people may feel relatively safe in their vehicles, the statistics show us that insurance remains important – not to mention it’s required by law. Insurance makes sure that any physical damage that happens during a collision is covered, as well as any damage inflicted on a vehicle by another type of accident — such as a falling tree.
Given its importance, people should understand what can impact their rates. These can include many factors, some of which you can control and some of which you can’t.
Here are a few examples of what can cause a person’s insurance rates to change:
This may be the most obvious factor and the one that has the greatest impact on a driver’s record. Fortunately, it’s also the factor that is most within drivers’ control. A history of tickets or traffic violations will cause a driver’s costs to rise on future insurance premiums. It can have a heavy impact, but there are insurance brokers such as Freeway Insurance that offer low-cost options to help get your record back on track.
Age and Gender
Statistically, young men are more likely to be in an accident than young females, which means they usually incur higher rates.
Married people get in fewer accidents than do single people, according to the numbers. Your previous driving history will add to this. For example, if you’re a man with a clean driving record, you could see your rates cut in half after marriage.
Your job can also play a role in how your insurance rates are calculated. According to the DMV, doctors, lawyers, real estate brokers, business owners and executives, architects, and salespeople are all subject to higher rates.
On the opposite end of the spectrum: scientists, nurses and first responders, pilots, accountants, teachers, and artists, are all statistically less likely to be involved in a collision.
Many insurance companies take drivers’ credit scores into account. While there may not be any specific point when your credit score starts to impact your rate, the consensus is that lower scores generally mean higher insurance premiums.
With all of these seemingly disparate factors playing a role in how insurance premiums are calculated, it can become overwhelming to shop around if you’re considered a high-risk driver. The good news is that certain insurance companies specialize in providing coverage to these high-risk drivers.