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Published On: Wed, Oct 26th, 2016

Study Shows Income May Determine Car Insurance Costs

A study conducted by an advocacy group called the Consumer Federation of America concluded people with high incomes and poor driving records may pay less for their insurance than those who have clean driving records but earn less. That was the case 53 percent of the time, even in cases where the high-income earner caused injuries. Let’s take a look at what these study results may mean for you as a cost-conscious driver, plus some specific ways you could save on your car insurance.

More About the Study

Researchers requested 600 quotes from auto insurance providers and received 464. The deficit was caused by the fact that insurers sometimes declined to provide quotes related to specific cities or for higher-income drivers, and in other cases, the insurers did not provide quotes at all.

Even more surprising than statistics that showed how higher-income drivers were more likely than people in lower income brackets to pay less for car insurance even if they injured others is a statistic that indicated in 70 percent of cases, a moderate earner with a clean driving record had to pay more for insurance than someone who earned more money and had recently been convicted of drunk driving. All instances were for hypothetical drivers.

Although you may not be able to make major income changes, there are other factors within your control that could result in lower premiums. The more you take time to shop around, the easier it’ll be to find an affordable coverage provider. Fortunately, these factors don’t directly relate to how much you make.

photo supplied, courtesy of guest blogging network

photo supplied, courtesy of guest blogging network

Choose a Higher Deductible

The deductible is the amount you pay before the insurance coverage takes over. When feasible, select the highest deductible you can afford. That could significantly reduce your overall premium costs.

Have Good Credit History

Research shows people who manage their credit well are less likely to make auto insurance claims. That’s probably why most insurers weigh credit data when determining quotes. Also, don’t just check your credit once every five years and assume it’s accurate the rest of the time. Review your credit report periodically, such as at least annually, and make sure everything looks correct.

Talk to an Insurance Agent

Shopping around for quotes on car insurance is time consuming, and could cause you to pay too much. Maybe you need Sacramento car insurance and decide the easiest way to research options is to go online. It could be the most convenient choice, but potentially not the most economical.

By instead having a face-to-face meeting about your car insurance, you’ll be able to immediately bring up concerns and get clarification on things you’re confused about. Furthermore, if you also get other types of insurance from your provider, such as for your home, the provider may offer a bundled rate.

Research that suggests income may be a factor in how much you pay for car insurance shouldn’t be too alarming, considering there are other things within your control that could help you pay less. Always get as well informed as possible before buying a premium to avoid excessive costs.

Author: Lolita Di

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- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

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