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While annual home insurance rates remain relatively constant – shifting slightly with inflation and building material costs – auto insurance premiums can seem somewhat capricious. There are a number of obvious causes for that, like accidents and traffic violations, but things like changes in employment, residency and ages of the insured can also impact your rates. To understand more fully, ask yourself these questions the next time you receive a premium change notification.


Did you get a new car?

You recently traded in your old car for a brand-new vehicle with a security system, more airbags and a rear-view camera. Your new vehicle is much safer, which means your insurance costs will go down…right? Not necessarily. Every vehicle is rated based on how much it would cost to repair, and with the amount of technology loaded into your new vehicle, the repair costs won’t come cheap. For example, many bumpers now have rearview cameras – which means replacing the bumper is more complicated (and expensive) than it used to be. So, before you go out to purchase a new vehicle, be sure to contact your agent to see how it will affect your current rate.


Are there new drivers in your household?

Your 16-year-old daughter just passed her driver’s test on her first try, eh? Well, congratulations…and condolences! Your auto insurance rate probably just jumped. Since teens are inexperienced drivers, they are more likely to get into accidents even though they typically drive fewer miles than adults. In fact, the rate of accident-related deaths for teens ages 16-19 is three times higher than that of drivers over 20. Not surprisingly, these statistics make teens and new drivers more expensive to insure.


Have there been any recent birthdays?

Generally speaking, the younger you are, the higher your auto insurance rates. However, that algorithm flips upside down as you reach retirement age – when your rates will start going upwith each successive birthday. That’s because drivers under the age of 25 and over the age of 65 are found to be statistically less safe on the road. Drivers older than 65, though experienced, are more likely to have impaired vision, use prescription medications and have poorer cognitive function. They also tend to suffer more serious and costly injuries. Since older drivers represent more of a risk for insurance companies, they typically experience a higher rate.


Have you recently switched jobs?

If you find yourself switching careers – and possibly changing a 5-mile suburban commute into a 30-mile urban one – it is likely your auto insurance rate will go up. Many carriers incorporate the number of miles you drive to work as a factor in your rate. Similarly, if your career change involves not only driving your vehicle to the office, but also to client meetings, expect a jump; the increase in your time on the road, as well as the miles traveled, may cause a rate change.


Have there been any major family or financial changes?

Major life turning points such as marriage, moving and financial changes, can directly impact your auto insurance rate. Statistically, married couples tend to have fewer claims than their single counterparts, leading to a lower rate. Meanwhile, because rates are determined by geographic area – sometimes even changing within the same city – moving can factor into your rate. Typically, rates are determined by zip code. If you live in a quiet suburb and move to a more urban area (with increased accidents and car theft) you will likely see an increase in your auto insurance. Another factor that many carriers now consider is your credit-based insurance score. Statistics show that those with higher credit scores are less likely to file a claim. Accordingly, a debit or credit may be applied to your premium depending on the quality of your credit score.


Have you recently been in an accident or received a ticket?

As most people know, driving history directly affects your auto insurance rate. Carriers can apply discounts to a policy based on a good driving history. However, they can also remove those discounts, or even apply surcharges, if you receive a traffic citation or are involved in an accident. While most carriers take the severity of the accident or citation into account when deciding how it will impact your rate, why leave anything to chance? Drive safely and you’ll be rewarded with lower rates!

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