You’re a model citizen and a responsible driver. You take pride in your car and ensure that it’s well looked after. But why is it that you still get insurance quotes that are high enough to blow a head-gasket in your budget? Why are you still being requested to pay hefty premiums when you are a respectable motorist with a vehicle that’s safe and well-maintained?
Auto insurance companies base their policies and premiums on more than your sober habits and your dedication to doing things the right way. When they quote you, they take more than just the value of your vehicle into account. Things like your age, how long you have had your driver’s license for and other metric-based factors can increase your rates.
There are actually many reasons why your car insurance fees may rise. Perhaps your agent neglected to inform you of these reasons upon application or you may have forgotten what you signed up for after a few years have passed. Allow us to share a few common and “odd” reasons for premium hikes, and what you can do to prevent them. If unfortunately, they are unavoidable, at least you can be prepared for what’s coming!
Odd reasons why car insurance costs go up:
- Your Car’s Value.
You’d think that because you drive a cheap car that your premiums would be, well, cheap too! But this is not necessarily so. In fact, the lower the value of your trusty steed, the more likely insurer’s will worry about the safety and reliability of your vehicle. Which in essence, makes sense.
Your rusty old set of wheels might get you from point A to B without any fuss, but in an accident, it might not offer safety measures that will keep you secure and the body and engine of the vehicle in one working piece. More modern vehicles boast built-in airbags, reverse alert systems and latest technology designs that help them to withstand accidents, keeping both you and the mechanical parts of the vehicle as safe as possible. These are factors which tend to lower premiums, even if the car is expensive.
There’s also a perception within the insurance field that because you have a cheaper car, you are more likely to be reckless with it. You might have an attitude of “can my car look worse than it already does”. While this judgement comes with no reliable statistics to back up the notion, it is something that an underwriter might take into consideration when drawing up a policy.
- Your Marital Status.
If you think the “I Do” you said to your wife was the only time you had to say the phrase, then think again! Do you acknowledge the fact that deeming oneself married will lower premium rates? I DO!
Yup, once you get hitched your premiums will automatically decrease, leaving the sad and single folk to fork out more for their higher insurance rates. Why? Once again there’s this perception held within the insurance industry that being married makes you a better motorist. Insurers regard singletons as flashy drivers who like to impress, therefore they drive more recklessly. And on the opposite end of the stick, they regard married people as family folk who take purposeful measures to keep safe so that they are around to care for their loved ones.
Whether you are recently divorced, widowed or yet to apply for that marriage license, being a singleton, unfortunately, does not play in your favour when it comes to insuring your car.
- Are You A Home Owner or A Renter?
So, what exactly does your living situation have to do with your car? Quite a bit if you are an underwriter for an insurance company. When your agent asks you if you rent or own your home, they’re not necessarily trying to sell you on home insurance (although they probably will do this too). Insurers believe that individuals who own their homes are more responsible motorists. While this might sound like a silly notion, there is, in fact, much evidence to back this claim.
Between 2012 and 2014, an online survey was administered by insurance manager Des Toups from Insurance.com. The objective of the research was to find if owning a home does, in fact, correlate with safer driving habits. The findings were as follows:
- 22% of the claims within this period came from motorists who were still living with their parents;
- 8% of the motorists who claimed were tenants and;
- Only 14.3% of the drivers who claimed were homeowners.
These findings give sound evidence that homeowners do indeed tend to be more responsible on the road and could possibly receive insurance discounts for owning a home. If you’re a tenant with good habits and excellent driving skills, however, you might have to fork out a little more for your premiums just because of your lease agreement.
- What Do You Do for A Living?
It might seem a little presumptuous and perhaps not very politically correct, but some insurance carriers link the risk of you getting into accidents with your profession. For instance, a physician’s meticulous attention to detail can give the insurers the impression that they are more cautious and attentive while driving. Most professions that come with social responsibilities, like being on the police force or teaching, for instance, are regarded as occupations that show a high regard for responsibility. If you find yourself in a high-stress career or on the road a lot, however, you are regarded as more of a risk on the roads.
Sure, if you tick the box that says “motor engineer” you might have to pay 14% more than someone who carelessly selects the title “engineer”, but it is, of course, your legal duty to disclose the facts as accurately and honestly as possible. If you are concerned that your occupation keeps you on the road too often and that you carry more risk, you can consult an independent agent and request that they source an insurance company that does not pay too much attention to detail when it comes to your choice of career.
- Do You Smoke?
An odd question coming from a motor insurance company, right? While you’d expect to see this query on application forms when applying for health insurance, you might be baffled as to why this tidbit of information is important to vehicle insurers. While not all carriers take smoking into consideration, some do on the basis that if you smoke while driving, you’re not paying 100% attention to the road. We suppose this makes sense, especially if you do tend to light up while on the road, puffing away and flicking ashes here there and everywhere!
These days, more modern vehicles do not necessarily come standard with ashtrays and built-in lighters, like they did in the more oblivious days. Some insurance carriers go to the extremes in that even if you don’t actually smoke, your premiums will still increase due to the mere fact that there’s an ashtray as a set feature in your car.
While some might find this reasoning more ridiculous than odd, insurance companies do have a foot to stand on when it comes to statistics. The National Highway Traffic Safety Administration of America did research that indicates that 1% of all distracted driving accidents were linked to the motorist smoking whilst driving. While this is a small percentage, it’s enough for vehicle insurance carriers to consider the risk.
- Your Level of Education
No matter how brainy you might be or where your talents might lie, if you don’t have the papers that confirm your level of education, you could be looking at higher insurance rates. Yup, a college degree not only gets you the job, it also tends to secure you lower premiums when it comes to applying for cover for your vehicle.
Why is this so? For the most part, it comes down to the speculation and stigma that those who do not have degrees are more irresponsible than their more qualified counterparts. While some might consider this unjust reasoning, some independent companies have taken it upon themselves to do research into the matter and their findings do in fact confirm a correlation where graduates are less likely to be in vehicle accidents.
There’s also evidence that suggests that those who have graduated and are hired for higher paying jobs are more likely to pay for small repairs out of their own pockets, instead of filing for claims each time.
While not all insurers take the level of education into consideration, if you do happen to find yourself without a degree, it might be worth your while to request the assistance of an independent agent who can find you reasonable cover despite what your academic papers say.
- Go- Faster Stripes
While those stripes down the side of your vehicle might impress your mates and the ladies, your insurance provider might not be as enthusiastic about their display. Your car might look snazzy, but your premiums, not so much. This is because many carriers do not want to take on customers with modified vehicles, even if the customisation is just a few strips of flimsy vinyl.
While racing stripes might feature on one’s car in all innocence, other modifications could possibly increase the performance of a vehicle, making it more of a risk. Add-ons also tend to be expensive and unnecessarily add to the cost of the car, which many insurers are expected to cover.
It’s also that many insurance providers have found that individuals with any vehicle modifications whatsoever, no matter how extreme or innocent, generally tend to have more accidents. It makes somewhat sense if you consider that car enthusiasts tend to push their cars for better performance, even if it is done recklessly so.
So, what will it be? Ditch the stripes and ditch the premium rates, or will you remain as daring as your “race” car depicts and take on your insurance carrier?
- The Colour of Your Car
There’s a great debate on whether the colour of your car does, in fact, affect your insurance rate. In actual fact it all depends on your insurance company. While some carriers disregard the paint of your vehicle, many do take its colour into consideration and quote accordingly.
Your premium may suffer because of the following three factors that come in to play with regards to the tone of your vehicle:
Visibility: Brighter colours are, of course, more visible on the road and can be spotted easily at some distance. Your more neutrally toned cars, however, often tend to blend in with the road or surrounds, making them less visible, especially on rainy or misty days. This means that the more dull or neutral the colour of your car is, the more likely you are to be at risk of having an accident.
Risk of hijacking: Evidence shows that apart from the make of a vehicle, colour also determines which cars are more at risk of being stolen or hijacked. More common coloured cars (white, silver and blue) are harder to spot or identify when tracking down a perpetrator, so they are easier targets.
A depiction of your personality: While the generalisation might not be a fair one, there is enough reason to believe that motorists who drive flashier coloured cars (think red and yellow) are more likely to be reckless drivers.
While some of these perceptions come with evidence to back the claims, the colour of your car cannot really determine its risk. While some insurance carriers prefer to have all of their areas completely covered, most insurers do not take the colour of a vehicle into consideration when quoting on a premium.
- Your Credit Score
Yup, insurers want to know absolutely everything about you, even how dependable you are when it comes to paying your dues. When applying for insurance, one of the first things the carrier will do is check your credit score. If you have a low or poor credit rating, your application for insurance might be rejected, although it is more likely that your monthly rate will simply increase.
This is because those who have poor credit ratings have a history of missing credit card or mortgage payments or have perhaps written a few bad checks in their lifetime. This will unfortunately deem you to be a less reliable insurance customer as the insurers might get the impression that you are likely to neglect to pay them at some point as well, given your unstable credit history.
Some insurers are more lenient and will consider you as a customer or keep your premiums to a minimum even if your credit score isn’t the greatest. This is because they are more interested in the section where you can prove that you have paid your bills timeously over the last few months and that you can, in fact, afford to pay your premiums over and above your other expenses.
More oddly, however, is that some insurance companies are under the presumption that if you are irresponsible with your money, you are likely to be irresponsible in nature too, which could make you more of an “at risk” motorist.
- You’ve Hit the Big Fifty
While maturity and wisdom come with age, insurance companies work on different scales and turning the big 5-0 might not come with well-wishes from your insurance agent. While 50 is considered an age where most are at their prime, your insurer might make you feel more like 80 than a healthy fifty-year-old.
Because you are now older and heading down the hill, carriers are of the opinion that old-age has set in and your capabilities are on the decline. This means that that premiums need to be increased as the risk is assumed to be higher.
While research shows that older folk actually tend to be safer drivers in that they usually always wear their seatbelts, are more prone to avoid driving while inebriated and are very unlikely to text or take calls whilst in the driver’s seat – the older age brackets do tend to have more accidents per mile than their younger generations (Source: https://one.nhtsa.gov/people/injury/olddrive/CommMobilityDementia/pages/ScopeOfIssue.htm)
While some of these odd reasons why car insurance costs go up might seem a tad presumptuous and a little eccentric, most of the reasons do come with statistics and evidence to back up the claims.
To avoid all possibilities of unfairness, however, and to ensure that you are given a quote that is based on reasonable factors, our advice is to consult an independent broker who has vast knowledge on the different insurance sectors as well as how each insurance company in your area works. Agents tend to look out for the customers since they have a more direct relationship and this means that they will help you to find the best cover without having to misinform insurers or try to cheat the system – which is, of course, illegal!