Ever wondered how the four-wheeled beast sitting in your garage affects your insurance policy? Or how your number of horses can take your policy from affordable to wallet-breaking real quick?
You see, insurance companies are all about minimizing risks, and your wheels play a starring role in their assessment. But which factors do they consider? And how does each factor impact your insurance premiums?
Let’s find out.
6 Factors That Affect Your Car Insurance Policy
When it comes to determining your car insurance policy, there are several vehicle-specific factors that make the difference between the “right” choice and the “wrong” one. Let’s check out six below:
1. Vehicle Cost
The cost of your car determines how expensive your insurance premiums will be. Expensive cars come with a higher insurance tag because they often have advanced features that cost more to repair or replace after they’ve been damaged.
So, if your car carries a hefty MSRP, it’s reasonable to expect your insurance premiums will be high. But that doesn’t mean you should agree to pay an unreasonably high premium, so make sure to only consult reliable providers like ROLLiN’ Insurance.
2. Engine Size
Cars with powerful engines usually have higher top speeds (think 300 mph) and the potential to reach higher speeds more quickly.
Unfortunately, insurers often view drivers with high-speed cars as having an increased risk of accidents — because they may be likely to overspeed. And to reduce this risk, insurance companies may charge higher premiums for these cars.
3. Vehicle Make and Model
As mentioned before, insurance providers usually consider sporty cars as high-risk because of their increased potential for accidents and liability claims. So they charge through the roof to cover claims filed by policyholders.
But it isn’t just fast cars that increase your insurance premiums. Insurers also charge more for covering heavy SUVs or trucks because these cars also have a high potential for being involved in severe accidents.
Plus, several cars have a track record of higher losses across various types of claims. For instance, the Nissan Altima 4WD has a record of high comprehensive, collision, personal injury, and medical claims, which makes it a high-premium car.
5. Vehicle Safety Features
Insurance providers usually consider vehicles with advanced safety features as less risky to insure, which leads to lower insurance premiums.
For instance, if your car has anti-lock brakes, they’ll reduce the risk of skidding on slippery roads and prevent accidents. Similarly, cars with a recovery strap will have a lower likelihood of getting damaged if you get stuck in a difficult situation because of bad road conditions.
5. Mileage
The more you drive, the higher your risk of being involved in an accident and filing an auto insurance claim. This means you’ll have higher insurance premiums if you’re constantly zipping about in your car.
But if you use it for occasional leisure trips or have a low annual mileage you may be eligible for lower premiums.
6. Car Theft Rates
If you buy a car that’s a hot favorite among thieves, you can bet a dollar that you’ll be shelling out more for your auto coverage. And according to NICB’s annual auto theft report, here are the top ten vehicles most likely to be stolen:
- Chevrolet Pick-up 2004
- Ford Pick-up 2006
- Honda Civic 2000
- Honda Accord 1997
- Toyota Camry 2007
- GMC Pick-up 2005
- Nissan Altima 2020
- Honda CR-V 2000
- Grand/Jeep Cherokee 2018
- Toyota Corolla 2020.
How to Save Money on Car Insurance
Now that you know how your vehicle affects your car insurance policy, here are some tips to keep those insurance premiums from putting a dent in your wallet:
1. Bundle Your Policies
We all love finding ways to keep a few extra bucks in our pockets, and when it comes to car insurance, bundling your insurance — a.k.a. buying several policies from the same insurer — can lead to big savings (up to 25%).
Aside from that, a multi-bundle policy saves you the hassle of keeping track of different insurers and reduces the risk of you getting dropped.
2. Ask for a Higher Deductible
When you pay a higher deductible, you potentially lower your insurance premium. For instance, according to the Insurance Information Institute, you could lower your collision and comprehensive coverage by 15 to 30% if you raise your deductible by $200 to $500.
But before you do that, make sure you have enough cash on hand in case you have an accident and need to file a claim.
3. Claim as Many Discounts as You Can
If you’re looking to save money on insurance, it’s worth exploring the various discounts you could get. For instance, if you rarely take your car out of the garage, you could score some low-mileage savings.
Similarly, if you’re a student or have never been in an accident for years, you might be able to get lower insurance rates or discounts.
The Takeaway
From your vehicle’s cost and engine size to its make and model, various aspects of your car can impact your premiums.
For instance, if your car can easily go above 250 mph, your insurance company will probably consider it high-risk and charge you more. But if your car does the job — going from point A to B — and has never been in an accident, you won’t have to pay through-the-roof premiums.
However, if you’re thinking of saving some cash on insurance, don’t forget to take advantage of higher deductibles, multi-bundle policies, and discounts. They’ll help you hit the road with the right coverage at the right price.
