Like many people, you might pay your monthly car insurance premium without giving the details much thought. This is relatively common. Having coverage in case of an accident is the only thing that matters, right? Well, no.

When it comes to automotive insurance, regardless of the provider, certain factors affect policy rates. Whether you’re a new or exciting driver, you can save money for coverage simply by knowing how. These five factors can have a dramatic impact on the cost of your auto insurance. You might find some of them surprising.

1. Credit History

Yes, your credit history can lead to higher car insurance premiums. Years ago, insurers did not consider this, but they do today. The justification is that someone with a good FICO score is financially responsible, meaning they will make their car insurance payments on time each month. So, if you have a poor credit history or even no credit history at all, expect to pay more for coverage.

On the flip side, if you have excellent credit, you will save money. Keep in mind that this varies somewhat according to the state. For instance, if you live in Hawaii, California, or Massachusetts, insurance companies cannot use your credit when calculating your premiums.

2. Gender

Although this might not seem fair, it is yet another factor that increases the cost of auto insurance. Males under the age of 25 pay roughly 15 percent more for protection than females of the same age do.

That applies even if they have an excellent driving record. Statistically, men in this group have a higher number of car accidents. Therefore, they pay increased premiums.

3. Annual Mileage

The more miles you put on your vehicle each year, the more you will pay for car insurance. Typically, insurance companies offer nice discounts to people with low-use mileage. When taking out a policy, you would not necessarily notice this. However, after getting the discount, the rate you pay would decrease.

4. Zip Code

People commit crimes more often and of greater severity in large metropolitan cities than in rural areas or smaller towns. For that reason, insurance providers factor in the zip code where you work and park your vehicle overnight. Along with that, the amount of congestion on the roads affects the rate of your coverage.

5. Driving Record

Although all of these are important, two of the best ways to lower your car insurance premiums are to improve your credit score and avoid getting traffic violations. With a clean driving record, you could easily save as much as 40 percent off the rate you pay. It all comes down to driving safely and following the law.

Additional Factors

The five mentioned are the biggest issues. However, several additional factors can directly affect how much you pay for insurance coverage. For instance, your age affects the cost of coverage. In most cases, drivers under the age of 25 and those over 65 pay the most simply because insurers deem them as drivers at a higher risk of causing an accident.

Even the type of vehicle you drive can impact your premiums. If you have a car with top-of-the-line safety features, you will probably enjoy a nice discount. In comparison, driving an exotic or expensive automobile is going to cost you more.

One last thing: insurance claims. Suppose you file several claims, whether as the at-fault driver of an accident or because the other party did not have coverage. In that case, the insurance company will likely increase your premiums. Just putting in a claim for your first accident is enough to have the insurer increase your rates for anywhere from three to five years.

What You Can Do

To start with, compare what different auto insurance companies have to offer. For this, you can use any number of online tools. Just conduct a Google search, and you will find many options that cost nothing. You can also contact insurers to gather information. One example, if you compare GEICO insurance to other options, you will likely find this particular provider has impressively low rates on quality policies.

Comparing insurance plans is the first step if you do not currently have a policy or you want to make a change. If you do have coverage, talk to your agent to discuss applicable discounts. Those two simple decisions will go a long way to reduce what you pay for car insurance. Just imagine what you can do with the extra money in the bank.

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