Have you ever been out to dinner with friends or neighbors and you start talking about auto insurance? It always seems like your friend or neighbor is paying less than you. It doesn’t make sense. You’ve seen the dents in their car; you are definitely a better driver. Why are you paying “more” for your insurance?
We get this question at the office on a weekly basis. Everyone is looking to save money. Here are a few factors to consider when comparing your insurance costs with your friends:
Household Members / Driving Record: You may have more drivers than your friend. You may have a youthful driver. You may even have a son, while your neighbor has a daughter. Yes, young men are more expensive to insure than young women. Someone may have a speeding ticket or an accident. Accidents and violations can be a major driver for premiums in insurance.
Usage: If you have an hour commute to the city while your neighbor works from home, your rate may be different.
Type of Car: Some car insurance companies used to charge more for red cars because they were “faster.” They no longer discriminate based on color, but every vehicle has a different rating “symbol.” This symbol is used to determine the rate for the car. The symbol is determined by a multitude of factors, including value of the vehicle, damage it can cause in an accident, as well as likelihood of being damaged in an accident. We have seen a Chevy Corvette be less expensive to insure than a Honda Accord.
Territory: All insurance carriers breakdown territories, usually by zip code. If you live in a densely populated area, your rates will be higher than if you lived in a rural community.
Type of Coverage: This is the most important difference to consider. You and your neighbor could have the exact same cars, number of kids, work at the same office, and both have a clean driving record. His is still cheaper than yours! In the state of Pennsylvania, the minimum amount of liability insurance you need to carry is $15,000 per accident. You may carry $500,000 per accident. This is a huge difference in coverage and presumably the main reason your insurance may be more expensive. While you are paying more, you carry drastically more protection in the event of an accident. The few extra bucks a month is worth the additional coverage in our opinion.
Discounts: Finally, there are a few discounts that your neighbor may take advantage of that you do not. Many companies offer discounts for being paperless, paying via recurring credit card or EFT, or even paying your premium in full. Give us a call today to ensure you are taking full advantage of these discounts.
Call us today to review your auto insurance.