Money Matters: Milestones can affect car insurance rates

August 18, 2017 01:30

Sponsored by NEFE

If you're a young driver with a new or expensive car, your auto insurance rates will probably be higher than a driver in their 50s with an older vehicle. But the ages of the policyholder and the vehicle aren't the only factors that determine what you'll pay each month to keep your car covered. Insurance companies look at many different metrics when setting rates. The number of accidents you've personally been in would naturally make a difference, but so do the number of claims made by other people in your same life situation and location. Insurance companies make money by knowing the numbers.

As Consumer Reports explains, some insurers will give you a break for having more education. College grads pay less than those with only a high school education. Being married helps, too. Married couples pay less than they would as single drivers. Avoiding that fancy sports car helps, but even more basic vehicles can mean savings. Switching from a sedan to a minivan can mean lower rates. Homeowners pay less for auto insurance. Most insurance companies offer discounts for having multiple lines, such as homeowners insurance or life insurance. Adding your teenage child to your policy will cost you more, but not as much as if they tried to get insured on their own. Luxury car rates can cost more due to the cost of repairing them, and as your edge toward retirement, your rates will gradually move up.
To help your listeners/viewers/readers learn more about car insurance rates and ways to save, talk with insurance agents in your market, as well as financial planners. They can demonstrate how rates can rise and fall depending on your life situation and offer suggestions on how to reduce costs, including new technology designed to monitor driving habits and reward safer drivers. And as always, remember it pays to shop around in a competitive insurance market to find the best deal.

Sponsored by the National Endowment for Financial Education
For more personal finance story ideas, click on the banner below:

Susan Antilla of The Street entered the 2016 NEFE/RTDNA awards contest with an investigation of how a popular mutual fund company may have left significant gaps in the security of customer information.