Why Is My Car Insurance So High? |
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Winston Takeda
7 September 2012
If you've ever forgotten about your car insurance bill until you've already run out of money, then you know the horror that comes with realizing you've got to do some deep digging into your sofa. Not having car insurance evokes fear of criminal misconduct, as we imagine being pulled over far from home without being able to produce that magical proof of insurance card. They might say that we can't drive without it, and force us out of our own cars.
Obviously, it's important to pay your insurance on time. But that's tough to do when you can't afford it. Why in the heck is it so high? And while we are on the subject, why is insurance prices so mysterious? Why can't it just be the same price as everything else? After all, they don't have different prices of pizza for everybody, do they?
The reason insurance is priced differently for everybody is they need to classify your risk. The more accurately they can guess your risk, the cheaper they'll be able to charge you. Imagine if they charged one price for everybody. People that were super safe drivers that only drove a thousand miles a year would be penalized. Since they almost never get into accidents, they'd be paying the same amount of insurance of a habitual drinker and driver who crashes his car into a mailbox every other weekend.
The first thing they do is put people into different categories. The more they can group you together with people that have the same risks, the more accurately they can determine your price. For example, older people are generally safer drivers than younger people. People that drive over fifty thousand miles a year are more likely to get into a wreck than people who drive less than ten thousand.
The most important thing is your past. People who have a ticket, moving violation, or accident in the last couple years are more likely to have one in the future.
So if you're wondering why you're car insurance is too high, then first look at your own demographics. You obviously can't change your age or gender. But you can change how often you drive. You can drive a little bit safer. You can change from a super expensive car to a really cheap one. This will all help to lower your rates.
The bottom line is that the safer you drive, the cheaper your insurance will be. So try not to speed, drive drunk, or crash into anybody or anything. You'll be fine.