So you’re a good driver. You’ve never been in an accident. You’ve never even made a claim on your car insurance policy. Why are you paying so much for car insurance?
There are a number of reasons why your insurance may be so high with no accidents. Today, we’re explaining all of these reasons to help you understand why you’re paying high prices. Sometimes, you’re legitimately paying too much. In other cases, insurers are charging a competitive price for your policy – and you just don’t understand how insurance pricing works.
What Goes into the Price of Car Insurance?
The price of your car insurance is about more than just your driving history. You might have a clean driving history yet still pay significantly higher premiums than someone with an accident-filled driving history.
Some of the factors that go into the price of car insurance include:
Your Driving Record: Insurance companies want to know your complete driving history before offering you a policy. This includes any accidents or incidents from your past. If you’ve never had an accident, then you might still pay high prices because of previous speeding tickets or traffic violations.
Your Driving Activity: How far do you drive to work every day? How many miles do you put on your vehicle every year? The more you drive, the riskier your driving activity is.
Your Credit History: Your credit history has a powerful effect on your insurance rates. Your insurance company may ask to see your credit history, including your debts, tax liens, personal judgments, and medical bills.
Your Location: Drivers in some states pay significantly more than drivers in others. We’re not just talking about drivers in rough winter climates. Drivers in Louisiana, for example, pay some of the highest insurance rates in the nation. Your state can have a significant impact on your insurance rates.
Your Demographic Data: Your sex, age, and marital status all impact your insurance rates. These factors are typically outside your control. However, your insurance company will look at historical driving data to decide on a fair rate for your insurance plan. If 23-year-old male drivers are a higher risk group than 58-year-old female drivers, then younger male drivers will pay more for car insurance.
Your Vehicle: Your vehicle, obviously, is one of the biggest factors in the price of car insurance. The type of car you drive has a big impact on the price you pay. If you’re driving a $200,000 luxury vehicle, then you’re going to pay a higher price than someone driving a $10,000 economy vehicle.
Your Policy Options: What’s covered on your insurance policy? How much are you paying for your deductible? Did you opt for a low deductible and a high monthly premium? Did you buy a comprehensive policy with all of the bells and whistles? Or did you choose a cheaper plan with the minimum liability coverage? The type of policy you choose – and the options on that policy – will have a profound impact on the price you pay.
Other Reasons Why Your Car Insurance May Be High with No Accident History
Some people have gone their whole lives without being in an accident – but they still pay enormous insurance premiums. Here are some of the reasons why you might pay high car insurance prices with no accidents:
- You have a terrible driving record, including points-related offenses like speeding tickets or traffic violations
- You have a history of big claims (someone who has made claims for three fender benders, for example, may pay lower rates than someone who has totaled one vehicle)
- You have a long commute and/or put a lot of miles onto your vehicle every year
- You have a poor credit history
- You’ve canceled auto insurance in the past
- You have a DUI or other similar offense
- You’re a young, unmarried male
- You live in a state or region with high insurance premiums
- You’re driving a car that’s perceived to be unsafe or riskier than an ordinary vehicle (smaller sports cars tend to be involved in more accidents than a Prius, for example)
- You’re paying too little for your deductible
- You’re paying for more coverage than you need
- You’re not bundling insurance plans together
- Someone has stolen or abused your identity (someone might have provided your driver’s license or personal information when they were caught speeding, for example, or there may be other record-keeping errors in your driving history)
Final Word on Why Insurance Can Be so Expensive
You’ve never had an accident – but you’re still paying a lot of money for car insurance. As we learned above, there are a number of reasons why you could be paying too much for car insurance. Maybe you’re driving a brand new vehicle, for example. Maybe you have a driving record filled with speeding tickets and traffic violations. Maybe someone stole your identity and abused your clean driving record.
Whatever your reason may be, be sure to check with an insurance agent or compare car insurance quotes to make sure you’re paying a competitive price for car insurance.