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Michigan Factors That Affect Car Insurance Rates

Unfortunately, car insurance is a necessary evil. It is mandated by state and federal law that motorists must maintain their state's minimum requirements for insurance in order to be able to operate a vehicle legally. It is a commonly known fact that the higher of a risk you pose to an insurance provider, the more likely it is that your insurance premiums will be higher than average. This summation is correct, but an insurance company must consider a wide variety of factors when determining what your car insurance rates will be. Some of these factors, liker a driver's license record, are quite obvious to motorists. However, there are multiple factors that you may not have realized help to determine your rates. By studying these factors, you can learn how to manipulate them so that you can receive more affordable rates on your car insurance premiums.

Once again, your driver's license record is going to be the most influential factor that affects what you will pay in premiums. You should know that the more claims you file under your insurance, the more your premiums will rise. Minor incidences, like a cracked windshield, may be expenses that are better paid out of pocket rather than being file through your insurance carrier. An accumulation of traffic tickets, collisions, or other moving violations on your driver's license record is going to lead an insurance company to believe that you engage in risky behaviors while operating a vehicle. Due to an insurance company's belief that risky behaviors increase the chances of you being involved in an accident, your premiums will rise accordingly.

If your driving history is somewhat spotty, there is no need to panic. There are several actions you can take to ensure that you receive a lower rate on your premiums. First, you can inquire about taking a defensive driving course. In Michigan, you can take one point per year off of your driver's license by taking a DMV approved defensive driving class. Over a period of years, this can enable you to save a substantial amount of money on insurance premiums. Dependent upon who is conducting the course, a class usually lasts between six to eight hours.

A motorist's age, unfortunately, also affects the rates that he or she will pay for their car insurance. This is one factor that you will not be able to control. Young adults, between the ages of sixteen and twenty four, represent the segment of motorists whom insurers have deemed to cause the most risk. Due to a lack of inexperience, testosterone, and a general sense or recklessness, young male drivers who are under the age of twenty five are four times more likely to be involved in an automobile collision than their female counterparts. Similarly, sixteen and seventeen year old motorists comprise the most fatalities of any age group from automobile collisions in the country. On the opposite end of the spectrum, senior citizens are the second segment of motorists that are charged high premiums. An insurance company assumes that elderly drivers will suffer from diminished physical and mental capacities as they age. This will likely increase the chances that they will be involved in a collision, and their rates raise accordingly.

Roughly ever thirty seconds, a vehicle is stolen in a city in Michigan. Especially with Detroit boasting one of the highest automobile theft rates in the country, your location is going to be an influential factor when determining your car insurance rates. One of the first pieces of information an insurance company is going to ask from you is your zip code. There are a couple of pieces of information an insurance company can derive from this data. One of these pieces of information is a sense of your financial well being. A suburban neighborhood in the city of Clinton is going to lead an insurance company to believe that you are more financially secure than a motorist who lives in an inner city neighborhood in Detroit.

The second piece of information of an insurance company will derive from your zip code is the criminal statistics for your neighborhood or community. These statistics allow an insurance company to surmise how likely you are to be victimized by a crime, such as theft or vandalism. Your rates will be determined according to the risk you pose of potentially filing a claim for damages. Certain actions, such as installing a car alarm or tracking device like LoJack in your vehicle, can allow you to receive a discount from your insurance company. This can help you to combat high insurance premiums that you may be charged because of your location.

Many motorists are unaware of the fact that in recent years, one's credit score and credit history has become an increasingly important factor in the premiums you will pay on your car insurance. It varies amongst companies as to whether or not they will use your credit score in calculating your rates. You may want to inquire about this before selecting an insurance company to do business with. As always, it is prudent to occasionally obtain a copy of your credit report to make certain there are no discrepancies or errors on your credit history. An insurance contract is viewed as a legal document entailing the services provided and the fees that will be paid for such services. An insurance company will want to ensure that you will honor your financial obligations in a timely fashion. If your credit history indicates that you are likely to default on your payments, then an insurance company may charge you high initial fees to start your policy in order to begin recouping any financial loss that they may incur because of you in the future.

A costly mistake that motorists make unknowingly is allowing their car insurance to lapse. Even a lapse of just a few days can count against you. Obviously, it is a violation of the law not to maintain the proper forms of insurance at all times. If you have a period in which you allowed insurance to lapse, it can result in higher premiums for you. Fortunately, most insurance companies will allow you to give an explanation as to why your insurance coverage lapsed, and this will be taken into account when factoring your premiums. While it may seem easy to fudge over a detail like lapsed coverage on your insurance application in order to save a few dollars, it is not an advisable action. Most insurance companies include a statement in the terms and conditions of your policy that states if a motorist is found to have falsified information on their application for coverage, the insurance company retains the right to terminate the policy, and all subsequent claims, at will. This could potentially result in a huge financial loss for you.

Knowing how certain factors influence car insurance premiums will allow you to determine how to make adjustments that will result in more favorable rates for you. Research and education will be your best aids in learning how to do this. If you have any questions, do not hesitate to pick up the phone and call your insurance agent.


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