Quality auto insurance is essential to staying safe on the road, but that doesn't mean drivers want to pay too much. Understanding how the costs are calculated can help you work toward a lower rate. Here's a look at a few elements that can influence the final premium.

What Factors Affect Auto Insurance Rates?

1. Credit Score

Insurance providers use an underwriting process that evaluates risk to determine policy prices. Many calculations include credit scores because insurers associate financial risks with the potential to make poor decisions behind the wheel. Having a lower score can result in a higher premium. 

Luckily, credit isn't permanent. It's possible to raise your score and qualify for a lower premium by paying all bills on time, reducing your debt-to-income ratio, and paying off all collection accounts. Making these changes can pay off within a few months—just in time to renew the policy. 

2. Age

Younger drivers tend to face much higher rates than their parents, largely because they're at a higher risk of being involved in an accident due to inexperience, speeding, and distracted driving. 

Older drivers also face challenges on the road. Medical problems, medications, and failing vision all contribute to more than 700 seniors being injured in accidents each day. As a result, older drivers can also experience higher rates. 

Even though it's not possible to control age, drivers can combat rising premiums by working to improve their driving skills. For instance, teens who take and pass driver's education courses and earn good grades can qualify for rate-reducing credits. Older adults, on the other hand, may qualify for a discount by taking defensive driving courses to keep their skills sharp. 

3. Vehicle Type

Policy premiums also consider the potential cost of an at-fault driver. If a policyholder causes an accident, then their insurance is responsible for covering medical costs and property damage. A larger vehicle, like an SUV or truck, can cause more damage because of its bigger body and more powerful engine. Trading a full-size truck or SUV for a sedan or compact car can result in a lower premium. 

Find an auto insurance policy for your budget with help from Western States Insurance Group, Inc. in Lea County, NM. As an independent agency, they offer a wide range of policy options from the industry's top providers. Whether you're shopping around for the best rate or buying a policy for the first time, the team provides personalized guidance to residents across Lovington, Hobbs, and the surrounding communities. Review their options online, and call (573) 396-1318 to get a quote.