Did you know that your marital status can cause your auto insurance premium to fluxuate in price? Many people are unaware of certain risk factors that play a role when their auto insurance rates are being calculated. Before you are caught off guard by the increasing prices, here are a few things that you should be aware of that will have an effect on the price you will be paying for auto insurance from a company like Village Insurance.
Marital Status
When auto insurance companies begin to calculate your premium, an important factor that will be taken into consideration will be your marital status. If you are single, you can expect to see a higher premium than if you are married. It has been shown that those who are married or in domestic partnerships are less likely to be irresponsible behind the wheel than those who are single. A study conducted by the National Institutes of Health in 2004 shows that out of over 10,000 adults, those who were not married were at higher risk for getting into an accident while behind the wheel of a vehicle.
It would be unwise to assume that just because you are married, means that your rates will not be lower, however. When you are married, auto insurance companies will also take your spouse's driving record into consideration. Your rates will go up if your spouse:
- Drives an expensive car
- Has multiple tickets
- Has been in many car accidents
- Travels more miles a month than you
Area of Residence
The area in which you live will also play a vital role in determining how much you will pay a month in auto insurance. When calculating the rate of your premium, auto insurance companies will look at the following factors:
- Population density
- Weather
- Crime rate
- Road conditions
- Unemployment rate
All of these factors help auto insurance companies determine if you are at risk for filing multiple claims because of the area you reside. For instance, if you live in a city area, you are at higher risk for being in a fender bender than someone who lives in a secluded country area because there are more vehicles on the road. Living in a city that has a higher crime rate will also put you at risk for more vehicle break-ins.
The unemployment rate in the town that you reside in is also a very important factor to take into consideration. In towns where unemployment rates are very high, people are more likely to let auto insurance fall by the wayside. Auto insurance companies consider that a high risk, because you will be more likely to be involved in an auto accident with another driver who does not have insurance on their car.
Gaps in Previous Insurance Coverage
Driving around without insurance may save you money. However, in the long run, letting your insurance lapse will only prove to be an expensive inconvenience when you start shopping around for coverage. Auto insurance companies will look at your prior auto insurance history. They will look for the following things:
- Premium payments
- Timely payments
- Number of accidents while uninsured
These three factors may seem simple enough; however, they are enough to make your coverage sky rocket. If you let your insurance lapse or if you did not make timely payments on your old policy, the auto insurance companies will consider you an "at risk" driver and your premium will be significantly more expensive. Some insurance companies on the open market may even deny coverage, making it harder to obtain.
Many people are unaware of the factors that determine how high or low their auto insurance will be. While being a safe driver and having a clean driving record will work in your favor, there are other factors that will work against you. Knowing what auto insurance companies consider "at risk" candidates will help better prepare you for the final price tag on your insurance coverage.
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