High Annual Mileage and 4 More Factors You Didn’t Know Raised Your Car Insurance Rates

 High Annual Mileage and 4 More Factors You Didn’t Know Raised Your Car Insurance Rates

The rate you pay for your car insurance is determined by a complex combination of multiple factors that insurance companies consider when they assess your risk as a driver.For instance, you probably already know that your driving history plays a big part in determining your car insurance rates. If you have a history of accidents, traffic violations or DUIs, your rates will likely be higher because these factors cause insurance companies to perceive you as a higher risk. It stands to reason that if you want to save on insurance, it’s essential to maintain a clean driving record.

But there are other variables you may not have considered that can influence the cost of your auto insurance. If you understand these factors, you can take proactive measures to optimize your coverage and end up saving big bucks on your premium.

High annual mileage is indeed a significant factor in determining auto insurance rates. “In recent times, annual mileage has gained prominence as a critical determinant of insurance rates,” said Eric Carlson, an independent agent at Eric Carlson Family Insurance. “Extensive research by insurance companies has revealed a direct correlation between the amount of time spent on the road and the likelihood of accidents.”

Carlson goes on to say that an increasing number of insurers are tracking drivers’ habits by monitoring aspects such as driving times, speeds, incidents of hard braking, and, most crucially, the total number of miles driven. Insurance companies have a couple of ways of tracking this data. 

“Many vehicles are now equipped with connectivity features that record substantial amounts of data related to driving behavior,” said Carlson. He added, “When a vehicle undergoes maintenance, the mileage is recorded and forwarded to services like CarFax. Insurance providers often purchase this data to ensure their customers’ reported mileage aligns with the actual figures.”

Mike Davison, founder of Superbike Newbie, said, “More miles driven equals more time on the road, which increases the risk of an accident.” Commuters who spend more time driving often face higher premiums compared to those who work from home or drive locally. If you are a high-mileage driver, you may notice higher insurance premiums as insurance companies perceive increased exposure to potential collisions.

However, responsible drivers who primarily work from home or have low annual mileage can benefit from potential savings. Some insurers offer discounts for low-mileage drivers, so always communicate any changes in your driving habits to your insurance provider to explore potential discounts.

Age, gender and marital status can influence your insurance rates significantly. Younger drivers, especially males, are statistically more likely to be involved in accidents, leading to higher rates. On the other hand, married individuals may receive lower rates as they are perceived as more responsible drivers. As you age, your premiums generally decrease, presenting an opportunity for savings over time

Where you live can also impact your car insurance premiums. Living in an area with high traffic, high crime rates or accident-prone roads can result in higher premiums. Parking in a garage and investing in anti-theft devices might help lower your rates in such locations.

Insurance companies may use your credit score to assess your level of trustworthiness. As Davison stated, “A higher score can indicate responsible behavior, both financially and behind the wheel, potentially reducing premiums.”Of course, that also means that a lower credit score can lead to higher premiums. To save on insurance costs, work on improving your credit score by paying bills on time and reducing debt.

Not Having a Dashcam

Installing a dashcam in your vehicle can potentially help reduce insurance rates in two ways. First of all, some insurers may adjust your premium because you have a dashcam installed if you simply ask. Additionally, having dashcam evidence can help prove your innocence in situations where you’re not at fault, preventing an insurance hike due to claims.

How You Can Save on Car Insurance

To save on car insurance, take a proactive approach to exploring various cost-cutting measures. Start by comparing quotes from multiple insurance providers to find the most suitable deal that aligns with your needs and budget. Also consider bundling your car insurance with other policies, like home or renters insurance, to unlock potential discounts.

Don’t forget to inquire with your insurance provider about available discounts based on your occupation, memberships or other qualifying factors. Assess your coverage needs carefully to ensure you’re not paying for unnecessary features. Taking defensive driving courses can not only improve your driving skills but also earn you valuable discounts with some insurers.

“One practical approach for individuals seeking to save money on car insurance is to consult experienced independent agents,” says Carlson. “These professionals have access to multiple insurance companies and can tailor policies to suit individual needs and risk profiles. By carefully evaluating each client’s specific circumstances, independent agents can identify the most suitable insurance options, potentially leading to significant cost savings.”

When it comes to car insurance, understanding the factors that affect your rates can save you a significant amount of money. While most people are aware of common factors such as driving record and vehicle type, there are lesser-known elements that can also affect your insurance premiums. In this article, we'll take a look at five such factors, with a particular focus on high annual mileage and its impact on your car insurance rates. By staying informed, you can make smarter decisions and potentially lower your insurance costs. High annual mileage:

One of the often overlooked factors that can affect your car insurance rates is the number of miles you drive each year. Insurers consider high mileage to be an indicator of increased risk because more time on the road statistically increases the likelihood of accidents. If you have a long commute or frequent trips, your insurance provider may classify you as a high-risk driver, leading to higher premiums. It's important to accurately estimate your annual mileage to make sure you don't overpay for coverage you don't need. Your credit score matters:

Believe it or not, your credit score can affect your car insurance rates. Insurers use a credit-based insurance score to assess risk. They found that individuals with higher credit scores tend to make fewer claims, which means lower premiums. Maintaining good credit not only benefits your financial health, but it can also lead to more affordable car insurance rates. Your location and zip code:

Where you live has a significant impact on car insurance rates. If you live in an area with a high rate of accidents, theft or even inclement weather, your premiums are likely to be higher. Urban areas often have more traffic congestion and a higher likelihood of accidents, leading to increased insurance costs. Similarly, some postcodes may have a higher incidence of car theft, which can also affect your rates. While you can't change your location, being aware of this factor can help you better understand why your premiums are what they are.

 Age of your vehicle:

The age of your car can affect the amount of insurance premiums. Older vehicles may have lower coverage costs because they are generally less valuable than newer models. On the other hand, brand new cars with the latest safety features may qualify for discounts due to their increased safety standards. It is essential that you inform your insurer of all the safety features of your car as this could lead to a reduction in your premium.

 Marital status and gender:

Your marital status and gender can also play a role in determining your car insurance rates. Married individuals statistically tend to have fewer accidents, which leads to lower insurance premiums. Similarly, some states no longer allow insurers to use gender as a factor, but in those that do, it can affect rates. Keep in mind that this factor may vary depending on your location and the specific laws governing insurance practices in your area.

While high annual mileage is a fundamental factor that can increase your car insurance rates, understanding the wider range of elements that affect your premiums is just as important. When you consider factors such as credit score, location, vehicle age, marital status and gender, you can make better decisions when choosing an insurance policy. Regularly reviewing your coverage and researching potential discounts can help you find the right balance between adequate protection and affordable rates, ultimately saving you money in the long run.