AUTO insurance companies use a wide variety of information to assess a driver’s risk and create their premium.
Some of this information is widely known, but other factors may come as a surprise.
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Moving is a common explanation why a driver might face a higher car insurance rate.
Your zip code is one of the first factors that insurance companies consider when evaluating your risk.
A driver parking their car in a big city like Los Angeles will pay more for insurance than someone parking their car in a less densely populated area with lower risk.
Expect to pay more for car insurance if your commute to work gets longer and the roads you’re driving on are in poor condition.
California is known to have the worst road conditions alongside the District of Columbia, reports US News.
Live in a state with legal cannabis, and you’ll face higher insurance costs.
Boston University reports that from 2000 to 2018, the percentage of crash deaths involving cannabis increased from 9 percent to 21.5 percent.
As of May 24th, 2022, DISA reports that cannabis is legal in:
- Alaska
- Arizona
- California
- Colorado
- Connecticut
- District of Columbia
- Illinois
- Kansas
- Maine
- Massachusetts
- Michigan
- Montana
- Nevada
- New Jersey
- New Mexico
- New York
- Oregon
- Vermont
- Virginia
- Washington
You don’t have to move for your location to impact your car insurance premium negatively.
States that raise speed limits will cause insurance companies to raise their rates.
An NCHRP study found that “increasing a speed limit from 55 to 65 mph on an “average” section of high-speed road resulted in about a 3% increase in the total number of crashes and a 24% increase in the likelihood that a vehicle occupant would be fatally injured.”, reports the Connecticut General Assembly.
Additional insurance-raising environmental factors include:
- Extreme weather
- An increase in uninsured drivers
- More accidents
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If your credit score goes down, your auto insurance will go up.
This correlation is based on insurance companies’ view that drivers with lower credit scores are more prone to claim-inducing incidents.
The economy often correlates with a bump in car insurance costs.
Medical and repair costs are two expenses that apply to auto accidents. A rise in medical and repair costs will always result in a car insurance company charging more for coverage, reports USAA.
Qualifying for discounts is an easy way to save money on vehicle insurance.
But you may find yourself in a situation where you no longer qualify.
An example of a revoked discount might be if a driver stopped bundling their home and auto insurance with a single company.
The most well-known explanations for rising insurance rates include fraudulent insurance claims and traffic violations.
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