Car insurance is expensive in the United States because many drivers have high-tech vehicles that cost more to repair. Car insurance can also be expensive for a driver with accidents and violations in their driving history. The main reason younger drivers pay high rates for car insurance is that they have a recent license and have a high accident rate. Data shows that drivers between 16 and 19 years old are at greater risk of accidents than any other age group.
Because of that risk, insurance companies charge younger drivers higher rates. The high premium is likely due in part to the state's crowded highways, Bankrate insurance editor Cate Deventer wrote in a report. All insurance products are governed by the terms of the applicable insurance policy, and all related decisions (such as coverage approval, premiums, fees and charges) and policy obligations are the sole responsibility of the insurance insurer. Anything that insurers can link to a greater chance of you having an accident and filing a claim will result in higher car insurance premiums.
He has extensive knowledge of several lines of insurance, including property and accident, health and life insurance. Nationwide, auto insurance rates are rising by an average of 4.9 percent, according to rate presentation data approved by S&P Global Market Intelligence. Used cars are generally cheaper to insure than new or sports cars because they have less value and are less expensive to repair. However, car insurance premiums vary among drivers, depending on several factors, such as zip code, age, and type of vehicle.
Car insurance companies charge different rates for the same types of coverage and value qualifying factors differently. Most auto insurance companies offer their policyholders a reduction in their auto insurance premiums if they meet certain criteria. Since car insurance is designed to pay for costs after an accident, including property damage and medical costs, anything that increases these costs will likely increase rates. The cost of car insurance listed in your zip code may be higher or lower than the cost of the next zip code.
While some qualifying factors are out of your control, you still have ways to save money on your car insurance policy. Men tend to pay higher car insurance rates than women because, in general, men file more insurance claims and have more accidents. Learn more about the factors that affect your car insurance premium and how you can reduce your insurance costs. Basically, that means that most insurers are losing money on auto policies, said Martin Ellingsworth, CEO and executive manager of P&C Insurance from the analysis company JD Power.
Because car insurance is a mandatory expense for vehicle owners in most states, increases in premiums can be surprising and difficult financially, especially for drivers who already pay higher-than-average rates because they insure teens, have accidents or fines on their records, or live in an area with a high cost of living. Since car insurance companies charge different rates for coverage, it's a good idea to compare prices and quotes from several insurers.