Why Are My Auto Rates So High or So Low? (Media, PA)

Hi, I’m Fred Burns insurance agent at Risk Averse Insurance. And today we’re here to talk about the million dollar question. Why are my insurance rates so high or sometimes low?

Well, there’s a thing called an insurance score that carriers use to determine what your rating tier is and every carrier varies on what they weigh that insurance score on to determine your rate. Some factors that go into that insurance score we’re going to get into right now. Some you may be well aware of others. You might not. Number one and what most people know that they’re rated on is your driving history. Obviously, carriers are gonna run your motor vehicle report and your loss report to determine if you have any accidents or violations that will, you know that show up on the report that you’re more susceptible to accidents. Obviously, if you have a ton of at-fault accidents, you’re gonna get a higher rate than someone with no accidents. One common misnomer with that though is at fault versus not at fault if you have a not-at-fault accident that actually can impact you as well, but we’re gonna do a video on that at a later date.

Another factor that goes into your insurance score is your zip code and this is a big one. Have you ever moved somewhere? And you just change your address and your rate changes? Well, that’s because that zip code is tiered specifically to that carrier. So if you’re in an area, let’s say it’s a high crime area, you’re gonna have a higher rate than someone in a lower crime area. Let’s say you’re in an area where the parking is on the street, bumper to bumper where you’re parallel parking a lot. So a lot of those fender bender accidents happen in that zip code that’s gonna be tiered higher than an area with maybe a driveway where you’re not, you know, near other cars as much when you’re parked. So zip code is a big factor in determining your insurance score, another one credit score and everyone hates this.

I hate it personally actually, but carriers use your credit to determine what your rate is. Some carriers more than others. Now, we don’t get your actual insurance score, but they do what’s called a soft hit. So it doesn’t impact your credit as far as an inquiry goes, but it does show a gauge of where your credits at. People with better credit are going to get a better rate than people with lower credit, agree or disagree with it. That that’s the way it is.

Unfortunately, another one is your age and experience. Younger drivers are gonna be significantly higher than an older driver. Um, carriers want to see experience at least three years of experience on your license. Uh There’s one tier and then it moves up from so on. So once you get to about the age 25 is when you start to be able to see better rates than you would if you were say a young driver at 16, 17 on your parents’ policy. Also, as you get older, your rates kind of tier as well. Uh Depending on your driving history that you have as you grow.

Finally, another huge factor that people are unaware of is prior insurance. Yes. What you have prior to coming into your new carrier is huge. So if you’re shopping around from carrier to carrier every six months, every year, you are gonna, you think you’re doing a good job by, you know, getting the best rate, but actually you’re on a, on a hamster wheel, you’re in the same cycle because the carriers like to look and see you have at least 3 to 5 years with one carrier to tier you the best. And now some carriers are even going as high as eight years. Also your prior insurance limits. If you’re someone that has state minimum limits as opposed to someone that has maybe 100,000 per person up to 300,000 per accident, you’re gonna get tiered better with the higher limits going into the new carrier. All these factors combined determine your insurance score, which then determines your rates. Now, there’s other factors like if you’re married or a homeowner that can give you discounts that can help with that. But these are the main factors if you didn’t know about this or you have more questions about this, contact your local agent or call us.

We’d be happy to review your insurance coverage options with you! Give us a call at 610-335-1139 or visit https://riskaverseinsurance.com.