According to the Insurance Information Institute, the average annual cost of car insurance is about $800 nationally, but that number does not come close to telling the whole story. Some people pay much more than that for coverage, while others pay much less. Fortunately, we here in Wisconsin have historically enjoyed lower rates on average than most other states in the U.S. However, the cost of coverage depends on much more than where you live. Insurance companies use special formulations to calculate a driver’s risk of filing a future claim. Where you land on the risk spectrum has a direct impact on the cost you will pay for coverage.
Calculating Your Premium
Insurance companies take a long, hard look at every aspect of your driving history, claims history, financial history, and more when determining how much to charge you for car insurance. They rely on research that correlates certain driver traits and behaviors to the likelihood of filing a future claim. The emphasis placed on these factors differs from insurer to insurer, which is why it is so important to shop around for coverage with an independent insurance agent here at Heinen Insurance. When one insurer wants to charge you more due to a traffic ticket or a teen driver on your policy, we will look for another that is more lenient on the factors that may be otherwise working against you.
Factors that Affect Your Rates
Most insurance companies look at a list of the same types of risks when determining how much to charge you for car insurance. Examples include:
- Your prior history of claims
- The number of recent car accidents you have had
- The number and type of citations on your driving record
- The age of the drivers insured under your policy
- The make, model, and value of your vehicles
- How much you drive your vehicle
- Where you live (e.g. high crime rate, rural with high-risk of deer collisions)
- Your history of managing money and creditors
Sometimes the things you think will affect your rate the most take a backseat to other factors that insurance companies consider more important. For example, you might assume that two-seater sports cars are more expensive to insure than a typical family sedan or pickup truck, but that is not always the case. In fact, some of the most commonly driven cars in the U.S. are also higher risk to insure since they are more likely to be targeted for theft. That is why insurance companies may consider your F-250 a higher risk to insure than your Audi A4.
Keeping Costs in Check
For the average Wisconsin driver, the cost is important, but not the most important factor when purchasing car insurance. Ultimately, insurance is meant to protect you against major financial losses related to vehicle damages, collisions, and liability. If you underinsure yourself to save some money up front, you could end up paying much more in the future.
Rather than cut coverage, the most important thing you can do to minimize your car insurance costs is work with an independent insurance agent here at Heinen Insurance. We can show you how to lower your rates without sacrificing coverage. Examples include:
- Raising your deductible
- Insuring multiple vehicles under the same policy
- Insuring your home and cars with the same carrier
- Taking an approved driver safety course
- Avoiding small claims for minor damages to your personal vehicle
We will also shop around for car insurance on your behalf until we find an insurance company with the coverage you need at a price that fits your budget. Call us today for more information and to request your free quote. We look forward to serving you soon.