Considering how important auto insurance is, it isn’t surprising that more and more people are having their cars insured every year. Unfortunately, rates for car insurance increase every year, making it harder for individuals to obtain protection for themselves. With the economy as it is, most aren’t really surprised by this development. However, what others don’t realize is that there are numerous factors contributing this effect any by knowing them, there’s a good chance that policy holders could manipulate how their rates turn out.

That being said, following are some of the factors that affect insurance rates today.

Rising Medical Expenses

Even with more and more individuals filing less claims, insurance companies are having a hard time meeting all financial demands. The main reason for this is the fact that medical bills are getting more and more expensive. Statistics show that insurers could pay as much as $20 billion in medical costs for just one year. Hospitalizations and medications are typically the ones that are really eating up the finances.

Older Cars

Even with safer models out today, policy holders rarely change their car every time they renew their insurance. Companies therefore expect older cars to be more accident prone and necessitate more repairs. Since they have been used for long periods of time, there’s a bigger chance of breaking down, therefore necessitating a claim.

Driver Age

Studies show that the age and gender of the driver are driving factors when it comes to insurance rates. Typically, it is the males in their 20’s that suffer through the worst rates while individuals in their 40’s enjoy the best prices. This is because the younger generation is more likely to suffer through accidents due to recklessness. Older individuals, on the other hand, are more careful but still have the necessary reflexes to smoothly manipulate the vehicle. Note that when a person steps at the age of 50 or more, the insurance rates can start going back up.

Driving History

Individuals who have had accidents over the past years would definitely suffer through higher rates during renewal. It’s a practical move for the insurance provider as there’s a large chance that the person would encounter auto problems again in the future. Even the traffic and accident history in a person’s city could also be a factor in situations like this.

Insurance Policy Changes

In some cases, the insurance company themselves change their policies to adapt to the current market. This usually happens when they find themselves paying out more than what they are taking in. Considering the economy nowadays, the chances of this happening is very high, forcing individuals to settle for exorbitant rates every time they renew or obtain new insurance.

How to Decrease Auto Insurance Rates

Of course, that doesn’t mean that individuals don’t have the chance to decrease their rates. By knowing exactly how to approach their insurance provider, it’s perfectly possible to obtain a reasonable rate for renewal.

First off, insurance holders must take advantage of their renewal discount. This is typically offered by companies for their older clients. Being a responsible driver would also be vital in lowering rates. If a person has a good track record as a driver, then they would be in the position to bargain or ask for a rate that they prefer. Keeping one’s car in top shape and purchasing something specially for safety could also sway insurance providers into granting lower rates.