15 Reasons Your Car Insurance Premiums Are So Darn High

Lowering your car insurance premiums might just be a matter of getting older...

Almost everyone in the U.S. who owns a car and drives it on public roads has to buy insurance (unless you live in Virginia or New Hampshire*). Rates are all over the map, and for some of us, auto insurance is a very large bill.

How do you know if you're paying too much? What makes auto insurance premiums go up? Let's take a look at some of the factors that affect the price of your car insurance.

(*In Virginia, you can pay a $500 annual fee instead of buying car insurance. This allows you to operate an uninsured vehicle at your own risk, and does not provide coverage.

In New Hampshire, auto insurance is not mandatory unless you fall into a high-risk category -- for example, if you are:

• Convicted of driving under the influece
• A habitual offender
• Convicted of leaving the scene of an accident
• Reinstating a suspended license
• At fault in an uninsured accident)

1. You're under 25

Drivers with less experience are involved in more accidents.

2. You're younger and male

Young men are often riskier drivers than young women. The Insurance Institute for Highway Safety says guys are more likely than gals to drive more miles and engage in risky behaviors such as driving under the influence or speeding. Some states prohibit insurers from using gender to price policies.

3. You're older and female

The table turns as life goes on. The Consumer Federation of America found that women between 40 and 60 often pay more for car insurance, even when they have a perfect driving record. There's no clear explanation for this, but it happens with a number of insurance companies and in quite a few states. Not all auto insurers charge women more -- one more reason to shop around when you're getting ready to buy a policy.

4. You're single

Married people have fewer accidents. Your rate might drop the day you leave for your honeymoon.

5. You get tickets

If you are cited for a moving violation, consider driving like a slow granny for a while -- your second ticket could trigger an insruance rate increase. The insurer will disregard the first ticket after a time, typically three years.

Parking tickets are not reported on your driving record, so they don't affect your car insurance.

6. You filed an at-fault claim

As soon as a claim is filed against your insurance, you become a more expensive customer. Expect your rates to go up, at least temporarily. However, don't be afraid to talk to your insurance company after you're involved in an accident. If you are not found to be at fault, your rates won't be affected.

You should be eligible for a lower rate after a period with no claims.

7. You have poor credit

Auto insurers check your credit. Any data that makes you look risky is a red flag. If you have collections, liens, unpaid taxes, judgments against you, or a history of late payments, you might pay more. Some states prohibit insurers from basing your rate on your credit score.

8. You cancelled an insurance policy

If you cancelled an auto insurance policy before it expired, you might pay more to get your next policy. Insurers give the best rates to long-time customers.

9. You drove uninsured in the past

Operating a vehicle without insurance makes you a riskier customer.

10. Your deductible is low

The deductible is the amount you have to pay out of pocket before the insurer covers a claim. If you have a $500 deductible and you file a valid claim for $1,500 worth of damage, you get $1,000.

Having a higher deductible will lower your premium.

11. Your car is expensive to insure

Expensive cars and luxury vehicles cost more to insure than inexpensive ones because the cost to repair or replace is higher. Small sports cars are involved in accidents more often than family sedans, so they come with higher premiums. Even if you only purchase liability coverage, you'd pay more to insure a big truck than a small hatchback because the truck can do more damage in an accident.

12. You have more coverage than you need

Consider the types of coverage you opt for. When a car is new, full coverage is appropriate. You wouldn't want to owe money on a car that's totaled in an accident. If you have a car loan, the lender will probably require full coverage until the loan is paid off. But if you're driving an older car with a lower value, consider dropping collision coverage, which pays for damages to your car when you are at fault.

Another factor to consider is the amount of coverage you carry. More coverage results in higher premiums. That said, lower coverage amounts can leave you financially exposed. Higher coverage limits offer peace of mind.

13. Your zip code

Some areas are more expensive than others. If you live where theft is more common or tornadoes happen every year, you might pay more.

14. You haven't asked for discounts

Contact your insurer to find out how you might bring your premiums down. Here are some situations that might make you eligible for a discount:

• You're a full-time student with good grades
• Your vehicle has OnStar, LoJack or another tracking device
• Your vehicle has an anti-theft device
• Low annual mileage
• Multiple vehicles on the same policy
• Multiple policies with the same insurer

15. You haven't shopped around

Insurance rates aren't set industry-wide. Call a few providers and ask for quotes.

It's you -- and it's them

Auto insurance rates are a dance. To keep costs low, it helps to keep your record clean, choose your coverage carefully, and avoid claims. Theoretically, the insurer should give you any discounts you're eligible for and periodically review your policy and rate. In reality, some insurance companies are not proactive about giving you the lowest price you qualify for. So take the reins, ask lots of questions, and be assertive about getting the lowest possible rate on your car insurance.