Updated: May 9, 2019
You may have noticed that car insurance rates differ from person to person, even though the vehicle being insured is identical in value. This is due to the calculation of the insurance company, where they determine the premium based on the price of your car, the risk involved with the car, government regulations, and how long you have been with the insurance provider.
How is the risk measured?
The insurance company will determine the risk involved with you car by looking at the profile of the driver. They look at several factors such as how old are you, where do you live, and more importantly your driving record. This means that having a history of traffic violations or accidents can rise your premium significantly.
How does my driving record increase the premium?
The premium will increase based on the frequency as well as the severity of the accidents or violations in your driving record. For instance, if you committed a major violation before, it’s almost certain that your insurance premium rise.
Minor violations will also affect your premium, but the increase would be little. In fact, for the first minor violation, some insurance companies will exempt you from a rate increase. The increase in premium usually ranges around 3-50%, but it can be higher or lower depending on your record.
The premium can go even higher after you have had an accident or violation because you won’t be qualified for safe-driving discounts anymore.
How long will the premium increase last?
Similar to how the insurance company calculated the increase in premium, the rate- increase will last for varying times depending on your accident or violation history. It also depends on how long the government records your traffic violations and accidents, because an insurance company usually base their decisions from records provided by them.
Lastly, there are regulations that limits how long can accidents and violations affect your rates. Not that even if you premium will increase for several years, after each year the amount of increase may go lower.
What if it’s not my fault?
Worry not, if an accident is not your fault, usually you’d be free from any premium increases. In some states, there are regulations that prohibits insurance from increasing your premium based on accidents that aren’t your fault. However, the insurance company will do some research to fin out who’s at fault before deciding not to increase your premium.
At Vianca’s Insurance, we work hard in making sure that our clients are well-protected with policies that they can afford. To learn more about how we can help, text or call our agency (619) 799- 9443.