CAR INSURANCE RATES

Why now is a good time to get a quote for your car insurance rates.

Car insurance rates have risen and risen for virtually everyone over the past years but at this present time there are a number of drivers who are actually seeing a decrease in car insurance rates; a shock to everyone including some of the insurance firms in question. There are a number of reasons for this change in the tide fuelled primarily by a change in structure, and increased amount of risk factors and a greater number of drivers on the road being at the safe age for motorists.

The change in structure and the increase in risk factors.

Car insurance rates are being structured into a multi tier pricing structure. Essentially this tiered pricing allows for a greater deviance in standard prices determined by the risk factors of individuals. More age groups are being introduced so instead of having an age range of, for example, 30 to 50 years old that would be broken down into two groups; the 30 to 40 and the 40 to 50 group. While this will obviously be a big advantage for some it will also be seen as a disadvantage to others. Those who are split into the lower risk categories will benefit but the reverse is also true.

The average of drivers.

A driver is at their safest and lowest risk when they are between the ages of 45 and 50. They have passed the young stage where fast and reckless driving combined with inexperience may lead to a number of accidents but they haven’t yet reached old age when a lack of alertness and possible health problems have a diverse effect on some people’s driving. The age of most baby boomers is now around that mark meaning that the average age of drivers has reached a safer level. Thanks to this change in demographics there are now, on average fewer accidents than there were several years ago and the average driver is less likely to have an accident. This means there is less risk involved in insuring drivers and so the risk premium in car insurance rates has dropped.

Credit.

Any insurance companies have to pay out millions a year because of missed or late payments and this figure has been built into car insurance rates. Now, however, car insurance companies are starting to credit check their potential customers so any with bad credit will see the force of this increased premium but those with good credit history won’t pay the price.

The summary.

While new structures and other factors have undoubtedly brought down the car insurance rates of many drivers some will still face an increase, however, the expected increase is only an average of 1.5% much improved on levels as high as 8% in the last few years. If you are in one of the newly formed low risk categories you will probably see improved car insurance rates.

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