Factors That Affect Your Auto Insurance Premium

Written by Jared Thames—Sales Representative

October 23, 2018 · Car Insurance, Personal Lines

Blog Factors That Affect Your Auto Insurance Premium

At Hennessey, Thames & Leavitt in Vicksburg we have access to more than 10 auto insurance companies. Each company has different underwriting philosophies and requirements. However, there are some similarities that each company uses to determine how much your car insurance will cost. The common factors that affect the premium are: age, credit score, claims history, driving history, and proof of prior insurance.

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If you have a young driver, you are well aware of how the age of a driver can affect the premium. Insurance companies take the approach that young people are less experienced and more prone to taking uncalculated risks, especially young men. In order to combat the price increase, companies offer discounts for young drivers who have good grades and those who have taken a defensive driver class.

Credit Score

Credit score is also a very important factor. The company is extending thousands of dollars in coverage on your behalf. They want to make sure you are able to pay the premiums. Companies usually split credit scores up into “rating tiers”. If you are in the top tier, you will get the best rate and vice versa.

Claims History

Claims history is a heavy factor. Let’s be clear, you buy insurance in case you need to make a claim—there is nothing wrong with making a claim. However, minor things should be taken care of out of pocket and let insurance take the big ticket claims. Comprehensive claims are generally not weighted as heavy as others. If you have a collision claim or an at fault accident, you can expect increases in your insurance premium. Claims usually follow you for five years, but some companies only go back three years.

Driving History

Traffic tickets are almost as heavy as having a claim. Speeding tickets and other moving violations can sometimes keep you from even getting coverage. The companies have the idea that if you can’t follow the rules of the road, you are most likely engaging in behavior that will ultimately end up in a claim. Wild drivers are often the center of large claims. Insurance companies do this to encourage better driving behavior and to protect themselves from careless drivers.

Prior Insurance

One thing many people don’t realize is the longevity credit. You get a large credit for having prior insurance and it takes into account how long you have been with that company. This concept works the other way too. If you don’t have prior insurance or if your policy has canceled, you will not get the most favorable rate. Insurance companies are able to see your claims history and are able to get a better feel for how risky you may be to insure.

Other factors include the type of vehicle and coverages selected. A $70,000 vehicle will cost more to insure than at $25,000 vehicle. Low deductibles on comprehensive and collision coverage also drive the premium up but this concept also works inversely.

At Hennessey, Thames & Leavitt in Vicksburg, MS, we are true auto insurance professionals. We understand the need for affordable auto insurance and the factors that influence the costs. Give Hennessey, Thames & Leavitt a call today for a full review of your car insurance policy.

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