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Why does my auto insurance cost more than my friends?

Why does my auto insurance cost more than my friends?

You cannot really compare your rates with another person’s rates.  There are numerous factors that are used to determine auto insurance rates.  Here are a few of the leading factors.

Household Members/Driving Records/Claim History – Every driver in the household, unless you are insured with a carrier that allows household member exclusion, are considered in the rating of your policy.  This includes their age, driving records, and claim history.

Usage – A person that uses their vehicle to visit many locations, such as an outside sales rep, pays higher rates than a person that drives to the same work location daily.  Statistics show that the person traveling less miles is less likely to be involved in an accident.

Type of Auto – VIN’s of vehicles are used to determine the vehicle’s insurance symbol.  Usually the higher the value of the vehicle the higher the symbol assigned, the higher the premiums will be.

Territory – All insurance carriers breakdown territories, usually by zip code.  If you live in a dense populated area your rates will be higher than if you lived in a rural community.

Discount – There are numerous discounts available that can affect your premiums.  Some of those include low mileage, homeownership, occupation, paid in full, claim free, prior insurance, payment history and good driver.

We hope this helps explain better how rates can differ from person to person. 

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