Without a solid understanding of the car insurance market and how it works you could end up overpaying for the coverage you need. Buying car insurance is different from buying many other forms of insurance, and insurers consider a number of factors when determining the premiums you will be required to pay.
The Credit Score Trap
One of the most surprising aspects of car insurance is that something totally unrelated to your driving ability may affect your premiums. Among the criteria many insurers use to determine rates, is your credit score. A low credit score could translate into higher premiums.
To avoid unpleasant surprises you should obtain a copy of your credit report before you start shopping for car insurance. Doing so can give you a heads up about any errors on your report and allow you to correct them before a potential insurer sees them.
Where You Live Can Affect Your Rates
Where you live can also have a profound impact on how much you will have to pay. Auto insurers use a number of statistics to determine regional rates, including the number of car thefts in a given area and the number of dangerous intersections that have been identified within a given radius. All of these statistics play a role in determining the premiums drivers in those areas will pay. While moving to another city or state to get cheaper car insurance may not be an option it is important to be aware of how geography can affect car insurance premiums.
Your Education and Your Job
Many drivers are also surprised to find out that their levels of education and occupation can also have an impact on their car insurance rates. While it may seem silly to charge higher premiums to those with less education, studies commissioned by the industry have shown a correlation between educational level and insurance claims. The same correlation seems to exist for those in particular industries and occupations.