The cost of car insurance is directly related to the cost of repairing the car with consideration to the driving record of the car owner or driver. Lower deductibles, extra insurance add-ons, and even carrying collision insurance will add dollars to the insurance premium rates. You may believe that for you these extras are necessities, but you will pay for them every time you write out the your check to pay your insurance bill.
Insurance rates are high because of where you live.
Residents who live in urban or heavily populated suburban areas will pay a premium for car insurance. These areas have several negatives that cause car insurers concern. Theft rates are generally higher in areas with higher population density. Accident rates are higher because more cars are crowded onto the roadways. Labor costs are usually higher in cities and the surrounding communities. All of these factors spell higher risk and higher costs to provide insurance to drivers who live or work here.
Your driving record and age are two of the biggest factors contributing to high car insurance premiums.
Speeding tickets, driving while impaired and accident claims are all signals that it will cost the insurer money to cover you while you drive. You are considered a high risk driver if these problems have occurred within the last 3 to 5 years. This is even more true if you have multiple cases of this type of problem. For young drivers, all of these issues are magnified. Young drivers are considered high risk as a function of their age. As a class, they have less driving experience. They are more likely to take bigger risks when behind the wheel of a car. Young drivers tend to be more easily distracted, which means they are not paying close attention to their driving.
The type of car that you choose will affect your insurance costs.
Driving a sports car that is targeted for speeding tickets and costs more to repair after an accident is a sure way to raise your insurance rates. These cars are frequently at or near the top of the list of cars that are most frequently stolen. Some models that are not considered sports cars can make this frequently stolen list, too. Cars that are popular have parts that can be easily stripped and sold through the black market. Insuring these types of vehicles will cost you higher premiums.
Owning and insuring cars that you do not drive will cost you extra insurance dollars
Unless you are a collector, it is best to sell or trade cars that you do not intend to use regularly. Having extra drivers does not cost you as much in premiums as having extra cars on the policy. Even inexpensive car insurance will cost you hundreds of dollars per year. If you get rid of the car, you no longer have to pay for the insurance.
Extra features on your car insurance increase your rates without always giving you extra benefits.
Items like towing, rental cars while getting your vehicle repaired and road hazard options raise insurance rates. If these are only used now and then, you may want to evaluate whether it would be cheaper to just bank a few hundred dollars to cover this type of need if it ever arises. Over time, most drivers will realize significant savings from taking this approach. It is like self-insuring for the infrequent and affordable risks.