Everyone wants to pay low car insurance rates. However, good rates aren’t available just for the asking. Insurance companies deal in risk. If an insurance company thinks that there’s a good chance that you will get in an accident, you will have to pay higher premiums. How risky are you? If any of the following 8 things apply to you, your insurer will consider you a risk. The more risky you are, the more you will pay in premiums.

1. Convicted of DUI
Have you been convicted of driving under the influence of alcohol or drugs? If so, you are likely to see a huge increase in your premiums. A DUI might be one of the worst things you can do in terms of car insurance. You are likely to be classified as “high risk” for quite some time, and the insurance company may even decide not to renew your policy. If your policy is canceled, then you will have a difficult time shopping around for a new policy – and you will pay a hefty price it.

2. Receive a speeding ticket
If you’re caught speeding, and receive a ticket, it can result in a jump to your car insurance premiums. Driving 20 miles over the speed limit is considered riskier than going five miles over. In some states, though, if you act quickly to take a special class, your ticket won’t appear on your DMV record. However, if you have a speeding ticket on your record, the insurance company may increase your premiums.

3. Cause an at-fault accident
If you cause a traffic accident, your insurance company is likely to add a “surcharge” to your premium. You can ask your insurance agent for a schedule that reveals how much your rates can go up after one accident. Some auto insurance companies offer “accident forgiveness” for your first offense. It is important to note, though, that the more accidents you have, the higher your premiums will be. If you have too many accidents on your record, your insurance company may not renew your policy.

4. Have your insurance policy canceled
When an insurance company decides to cancel your policy, it can raise red flags when you shop for insurance elsewhere – resulting in higher premiums. If you have too many tickets, accidents or multiple DUIs, you may find that your auto insurance premium keeps climbing higher until the company finally decides to cancel your policy.

5. Add a risky driver to your policy
Your auto insurance rate isn’t based solely on your driving behaviors. Anyone that you add to your policy is considered. So, if you add a risky driver to your policy, your auto insurance rate is likely to sky-rocket. Risky drivers can include teenage children and spouses with an accident history. If you marry a risky driver and add him or her to your policy, you should expect an increase. The good news for teen drivers, though, is that many insurance companies offer good student discounts.

6. Purchase a car with a high claims history
The type of car you buy matters when it comes to car insurance. Some car models tend to have a higher rate of claims than others. Auto insurance companies expect drivers of sports cars to drive faster, and perhaps recklessly. Another consideration is that the liability coverage on your vehicle might be higher if you could do more damage to another car in an accident. Some SUVs, such as Hummers, have higher liability rates because of the damage they can inflict on people and property.

7. “Soup up” your vehicle
It’s tempting to “soup up” your ride. Perhaps you want to add a more powerful engine or trick out your car with spoilers and custom wheels. Making modifications to your car generally means that you are increasing its value. If you want coverage for your modifications, you should tell your insurer if you modify your car. Your standard coverage may not be adequate. Of course, you are likely to pay higher premiums for your modifications.

8. Trash your credit rating
Auto insurance companies consider your credit information, filtered through a formula to create an “insurance risk score,” to determine how likely you are to file an insurance claim. Your premium could increase if you have a bad credit score, even if you haven’t filed a claim. Car insurers equate responsible financial behaviors with responsibility in other areas of life. If your credit is poor, auto insurance companies worry that you will be a risky driver as well. Do what you can to meet your credit obligations on time, and keep a good credit history. Read about how your credit history affects your home and car insurance rates.

Bottom line
Auto insurance companies take into account a number of factors when setting your premiums. If the company is concerned that your driving behavior and other factors will result in claims that they will have to pay, then you will be penalized with higher premiums.

Be Sociable, Share!