Car Insurance Premium Factors

Car Insurance Premium Factors

I’m Ed Smith, a Stockton personal injury lawyer. Many factors come into consideration when an automobile insurance company calculates your premium rates. Some factors of which many may not even know about. For more details on car insurance premium factors, please read our detailed article below.

Auto Insurance Premium Statistics

A 2018 State of Auto Insurance report by TheZebra.com indicated that automobile insurance rates varied drastically from state to state. The study revealed that rates increased from 37 to 44 percent in Texas, Illinois, Florida and California since 2011. The report concluded that the average annual insurance premium for a resident of California was $1,713. The most expensive city for auto insurance was Los Angeles and the least expensive city was only less than three hours away in Los Olivos.

Residence and Insurance Premiums

Many may not know that insurance companies base their rates on where they live. Providing a state and zip code to an insurance adjuster can reveal underlying details about your area of residence including:

  • Crime Rates: Higher crime rates such as hit-and-run accidents, vehicle vandalism, and theft typically mean higher premiums.
  • Number of Claims: An increased premium may apply for areas with a higher-than-normal number of claims.
  • Population Density: A clear correlation can be made in densely populated areas as more vehicles on the road increases the potential for auto accidents.
  • Road Conditions: Increased insurance costs may apply to areas with dangerous intersections and potholes resulting in serious property damage.
  • Unemployment Rates: In areas with higher unemployment rates, some drivers may skip out on auto insurance. This can result in an increased number of Uninsured Motorist (UM) claims, increasing the overall premium rates in the area for drivers.
  • Weather and Climate: Areas subject to inclement conditions, such as snow and ice as well as floods and hailstorms, may result in higher claims and comprehensive coverage premiums.

Insuring a Young Driver

It is no surprise that adding a young driver to your auto insurance policy boosts the premium. However, gender plays a role in average annual insurance premiums as a whole. Teen girls typically cost less to insure, increasing the insurance premium of a family from 59 to 106 percent. In contrast, teen boys drastically increased a family premium from 78 to 130 percent.

Maximizing Insurance Premium Discounts

Qualifying for an auto insurance premium discount is a great way to save money. Some of these discounts are as follows:

  • Driver’s Education Course: Insuring a young driver can be quite expensive. Some car insurance companies offer discounts for teen drivers who have completed a driver’s education course.
  • Good Driver Discount: This discount is common among auto insurance companies. Drivers earn this discount by going accident-free and traffic violation-free for a certain amount of time.
  • Good Student Discount: Drivers may be able to save money on insurance premiums if they are a full-time or part-time student that meets certain grade point requirements.
  • Multi-Vehicle Discount: A family may be able to save money on insuring all of their household’s vehicles on their insurance policy.
  • Paying Premiums in Full: Certain auto insurance companies may offer a discount to drivers who pay their policy in full.

Insurance Premium Penalties for Distracted Driving

Distracted driving is a dangerous activity. In fact, a 2015 report by the National Highway Traffic Safety Administration (NHTSA) concluded that 391,000 parties suffered serious injuries and 3,477 parties were killed by distracted driving accidents. Automobile insurance companies in certain states are taking action into their own hands by penalizing a driver convicted of texting while driving by increasing their premium rates.

Hybrid Vehicles Cost More to Insure

Hybrid vehicles, such as the Toyota Prius and the Nissan Leaf, are popular among those who commute frequently for school, work or leisure. Many who own these “green cars” may not be aware that they may be paying a higher price for automobile insurance premiums. Many factors come into consideration when determining the insurance premiums of a hybrid vehicle, such as:

  • Price: The value of an insurance premium is directly affected by the price of a vehicle. Hybrid vehicles are generally priced higher than gasoline vehicles for their notable fuel efficiency attributes.
  • Service: Hybrid engines require specialized service by specially-trained auto mechanics. This may limit your options towards finding a reliable and affordable auto repair shop. Even minor repairs for these vehicles may result in a large bill.
  • Parts: Automakers design and manufacture hybrid vehicles with particular parts to reduce fuel consumption and pollution. Parts for hybrid vehicles also play a factor in insurance premiums. The cost of a damaged battery for a Honda Civic hybrid or a Toyota Prius may range anywhere from $2,000 up to $4,000. This price increases drastically from $8,000 to $15,000 for vehicles such as the Chevrolet Volt or Nissan Leaf.
  • Drivers: The fuel economy of a hybrid vehicle can influence a driver to spend a lot more time behind the wheel. With more miles on the road means the increased risk of an auto accident along the way.

More Posts by Ed Smith, a Personal Injury Lawyer in Stockton ~

Personal Injury Attorneys in Stockton

I’m Ed Smith, a Stockton personal injury lawyer. Auto accidents may cause serious injury or even death to those involved. If an auto accident has injured you or someone you care about, please call me at (209) 227-1931 for free, friendly advice. You may also contact me toll-free at (800) 404-5400.

I’ve assisted families of Stockton with their personal injury and wrongful death claims since 1982.

A list of ratings and reviews by my former clients are available for your viewing at:

I am a member of the Million Dollar Advocates Forum for my ability to obtain case verdicts in excess of $1 Million.

Take a look at my Past Verdicts and Settlements page.

Image Attribution: By Daniela Cuevas via Unsplash

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