We’re all looking for affordable car insurance or discount insurance. It’s one of those expenses where we frequently look at our options for cheaper coverage while maintaining quality protection. And while we’re required to have insurance, we still have questions about our insurance policies.
Here are some frequently asked questions regarding auto insurance rates, and the answers to them. If you have further questions about your policy, inquire with your car insurance company.
Why are car insurance rates higher for younger drivers?
Even though it might seem like it, insurance companies don’t have a bias against younger drivers. Rates are based on data, not years on the planet. And insurance companies have decades of data they use to track trends and, in turn, formulate rates.
So, what have those trends shown? With less experience behind the wheel, younger drivers are more prone to auto accidents and reckless driving. Younger drivers usually don’t have enough financial history to form an insurance score, or if they do, it’s usually a low score, thus negatively impacting their insurance score. The lower the insurance score, the higher the rate.
Will my rates go up if I’m involved in a not-at-fault accident?
This question has a lot of variables involved, so there is no clear-cut answer. Outcomes will vary by state and by insurance provider. In general terms, the details matter for each not-at-fault incident. The factors that played into the vehicle incident are then viewed through a threshold—does what happened correlate to long-term results with the same outcome?
So, while you might think a not-at-fault incident can’t raise your rates, it all depends on the details.
Does where I live impact my rate?
Where you live has a major impact in determining insurance rates. There are two main factors regarding location—population density and state coverage requirements.
In general, the higher the population density, the higher your rates due to the increased likelihood of an auto accident. The more things you have moving around you, the chances increase of them hitting you or vice versa. Those residing in major metropolitan areas will pay more for auto insurance than those living in rural counties.
Each state has minimum coverage limits for car insurance. Some states are higher than others. The higher the minimum limits, the higher the insurance rates.
A lot of factors play into the final rate you receive from a car insurance company. Be informed of the process, and you’ll better understand where the money is going to help you stay protected on the road.
This document is made available by Sentry Insurance Company and its subsidiaries and affiliates (collectively “Sentry”) with the understanding that Sentry is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals. THE INFORMATION CONTAINED IN THIS DOCUMENT IS DISTRIBUTED BY SENTRY “AS-IS”, WITHOUT ANY WARRANTIES. SENTRY WILL HAVE NO LIABILITY TO ANY PERSON OR ENTITY WITH RESPECT TO ANY LOSSES OR DAMAGES CAUSED, OR ALLEGED TO HAVE BEEN CAUSED, DIRECTLY OR INDIRECTLY BY THIS DOCUMENT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND FOR PROPERTY DAMAGE AND DEATH) OR OTHER GROUNDS.