Everyone has wondered why their car insurance is so expensive, everyone. Your Uncle Joe’s neighbor’s best friend only pays $19.99 a month for his brand new SUV, why are you paying $200 for a 2010 Peugeot? The answer makes more sense than you might think.
Uncle’s Joe’s neighbor’s best friend, for simplicity, let’s call him Uncle Joe’s Neighbor, might have a perfect credit score, a spotless driving record, and live in a low traffic area (like Rosendale NY), and drive a 2018 Honda. Also, Uncle Joe’s neighbor is most likely telling “fish tales.” You know, embellishing, because nobody pays $19.99 a month for car insurance anywhere in NY, but we’ve all heard these stories though am I right?
Also, Your credit score might be 380, you have a ticket maybe an accident on your driving record, and you might be living and driving your 2010 Peugeot in Newburgh NY. These things all change how the car insurance companies look at your rates.
Let me explain:
– Car insurance companies look at your credit score, the higher the credit score the lower the insurance rate. They see people with lower credit scores as being a higher risk for fraud. This reasoning is based on strong statistical analysis. Unfortunately, like all statistics, it doesn’t hold true for everyone in that situation but when you are a company insuring tens of thousands of people, you have to rely on statistics.
– The car you chose can also increase your rates astronomically. Hondas are everywhere and the parts are affordable, making them cheaper to repair if they’re ever in an accident. Peugeot is a whole different ball of wax. This company is not widely sold in the US and the parts to repair/replace are very expensive. Which care do you think is cheaper to insure? If you said the Honda, you would be correct.
– Your driving record shows the insurance companies what to expect from you, a clean driving records lets them know that you are either an excellent driver or you are just really good at avoiding speed traps. A driving record filled with speeding tickets, moving violations, and DWI/DUI’s lets them know that they had better get all the money they can from you PRONTO.
– Where you live has an impact on your rates as well. The closer you live to NYC, counties like Rockland or Westchester pay higher rates than those who live in Ulster or Dutchess counties. There are caveats if you live in Newburgh (Orange Co) or Poughkeepsie (Dutchess Co) your rates will most likely be higher than someone who lives in Otisville (Orange Co) or Pine Plains (Dutchess). Why do you ask? Because these areas are more densely populated and have a higher rate of accidents as well as break-ins and car theft, and these things drive up YOUR car insurance rates.
– Your insurance carrier. Every carrier has their own rating system so every carrier has their own price. Their price is based on their experience. If company A had $1,000,000 in claims payouts over the last 2 years and company B had only $300,000 in claims paid out over the same period, then company B will have a lower rate the following year due to better results.
Working with an independent agent like Hudson Valley Agents can significantly reduce your monthly car insurance payments without any reduction in coverage (and maybe even improved coverage’s.) Imagine going to an agency that only has one company (company A) or going to another agency that has company A, company B, company C, D, E, F… Where do you think you’ll do better?
Here are some things that do not impact your auto insurance rates in NY:
– Driving a red car
– Whether or not you wear glasses
– Your height or weight
– Your occupation
Do not be fooled by those incredibly low prices you see in commercials or the internet. Unless you understand coverage limits and insurance lingo, you may find yourself seriously underinsured.
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