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What Factors Affect My Insurance Premiums?

5 Reasons Why Your Premium May Be Higher

As of 2019, about 12.6% of United States drivers are uninsured. Often, many people report that cost plays a significant role in their decision not to obtain insurance, even if required by law.

Insurance premiums and additional policies can add up over time, but what contributes to this? While there are some methods of reducing the price, some factors can influence the premium regardless. Here are five to consider.

1. Accident History

It should come as no surprise that people with a known record of accidents may have to pay more in premiums and coverages. Insurance carriers regard these drivers as being "high risk," so they take this precaution to reduce unsafe driving habits. Furthermore, severe collisions, like those resulting in injuries, can cause premiums to increase more significantly—reportedly by an average of 46%.

Although insurers aim to remedy this by offering safe driving programs that reward accident-free drivers, it's still just as important to take the steps necessary to reduce negative driving behaviors.

2. Type of Vehicle

Along with driving history, the actual make and model of a vehicle may influence how much a driver pays in insurance. For example, a luxury car like a Tesla will cost significantly more to insure than something like a Honda Civic.

While the general cost of the vehicle plays a role, insurers will also look at speed/acceleration, size of the engine, how likely it is that the car may be stolen, and other safety features available to determine appropriate costs. According to some studies, the best vehicle purchases for keeping premiums and overall insurance costs lower are mid-sized and older models.

3. Driving Habits

Accident history is not the only component of a driver's habits that may be used to determine insurance cost. In general, anything that could potentially increase the possibility of being in a collision or sustaining other damages may be deemed a reason for an increased premium. This may include:

  • How often the vehicle is used
  • Frequency of nighttime driving
  • What the vehicle is used for (business or personal)

A history of driving citations for things like speeding may also cause a premium increase.

4. Driver Age

Parents of teen drivers beware—the age of the person behind the wheel can significantly affect how much someone pays in insurance. In fact, teenagers may have to pay over three times as much in insurance as drivers aged 40 and older.

This increase is primarily due to the fact that inexperience often plays a role in the likelihood that someone could be involved in a crash. For example, in Oklahoma, drivers aged 19 and younger were involved in 43% more crashes than drivers aged 30 to 40 in 2020.

5. Place of Residence

As mentioned above, the likelihood that a vehicle may be stolen can affect how much the driver pays in insurance premiums. Because of this, where someone lives and where they park their car can be the difference in paying a higher rate.

Urban areas, neighborhoods with higher crime rates, or parking the vehicle in the street rather than in a garage can lead to a higher premium. Population density is also a factor since emptier roads typically mean less risk for multiple-vehicle collisions.

Tulsa Insurance Claim Attorneys

When you've been involved in a serious collision that left you injured, you don't have to take on the insurance company alone. The team at Aizenman Law Group can help ensure that your rights are protected throughout the claims process. To get started with a free consultation today, call (918) 215-8856 or fill out this short form.