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Five Basic Facts You Need To Know About Car Insurance

It is a good idea for men and women who own vehicles to know as much about car insurance coverage as they can. Here are some basic facts that drivers in every state should know.

The first fact is that the more educated a driver is the more likely they are to have lower car insurance premiums. Earning a college degree shows insurance companies that you are someone who is disciplined and focused. It pays to earn at least a Bachelor’s degree so that you can see lower insurance premiums rates.

The second fact is that gender can play a big role in your car insurance premiums. This is because more men file insurance claims than women do. They also will pay more than $15,000 more than women for their insurance premiums. Women are basically rewarded because they are not as aggressive as men are when they are behind the wheel of a car.

 

The third fact is that insurance companies will not typically make a huge profit on the car insurance premiums that you pay. When an actuary sits down and calculates your premiums they aim to basically break even. The real profit comes from the interest on the payments that are made. This is because most drivers will have to file at least one insurance claim in their lifetime so they lose money on each driver in the end.

 

The fourth fact is that your credit score says a lot about who you are and the risk you have to carry as a burden. Most states allow car insurance companies to ask for your Social Security number or tax identification number so that they can pull a driver’s credit report. Before shopping, you will want to make sure that your credit score is above 600 to 650 because at this threshold you will have lower insurance premiums.

The fifth fact is that once you hit 55 to 65, your insurance premiums will increase once again. Most drivers think that younger drivers pay the most but once drivers become senior citizens their reflexes slow down and they can become impaired drivers. Many older drivers have to file claims for fender benders and minor traffic accidents which is why it is so expensive to insure them. Elderly drivers should consider using public transportation if necessary once they reach 65 because they will end up paying very high insurance premium rates when they hit 70 years old.