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Why does your car insurance premium cost that much? Well, the premium that you pay is based on factors like the insurer that you choose, the car that you drive and your driving record. There are some other factors that affect your premiums that you may not have anticipated. These are some of them:

Your Age

How old are you? Your current age may affect the size of your insurance premiums. Drivers under the age of 25 tend to pay more for their car insurance, particularly teenage boys. Teenage boys are statistically the most likely demographic to make reckless decisions on the road. This reckless behavior leads to more collisions and traffic violations.

Once you are above the age of 25, your insurance premiums should level out. Your age shouldn’t increase your payments for a long time.

When you reach the age of 65, you might find that your premiums go up again. Seniors are considered another demographic that’s at risk when driving. Seniors are also more likely to suffer from injuries during accidents, which means they are more likely to make insurance claims for medical care.

Your Credit Score

The consumer credit score sitting on your credit report can influence your ability to get approved for loans, the size of your interest rates and the size of your credit limits. It will also influence your car insurance premiums. That’s right—if you have a low credit score, you may pay more in insurance premiums.

Why? Insurers believe that you are more likely to make an insurance claim when you have poor credit. It has nothing to do with your driving.

Your credit score isn’t set in stone. If you feel like your score is far too low, there are certain habits that you can take on to raise your credit score over time. These habits include paying your bills on time, reducing your credit card balances and avoiding too many hard credit inquiries.

Your Deductible

When it comes to your car insurance, a deductible is how much you agree to pay out of pocket when you file a claim. Once you’ve paid this deductible, your insurer will be able to provide coverage for the remainder of your claim. Most car insurance deductibles range between $500-$1000.

Now, the size of your deductible will impact the cost of your car insurance premiums. When you choose a low deductible, your insurer is likely to charge you higher prices for your premiums. When you choose a high deductible, it is likely to charge you less for premiums.

Does this mean you should call your insurer and raise your deductible? If you’re hoping to pocket some extra money, you could technically try this strategy to lower your premiums. But you have to be aware that this decision can be financially risky. Raising your deductible could make a stressful situation, like getting in a collision, much more stressful. You might not have enough money sitting in your emergency fund to cover the payment right away.

If you’re ever in a scenario where you don’t have enough savings and you have to handle an emergency expense, you can try to borrow funds through a personal loan. As long as you meet the eligibility requirements, you can apply for a personal loan online. The loan application process is straightforward and speedy—you could submit yours in under 10 minutes. If that gets approved, you could use the borrowed funds to cover an urgent expense. Then, you could follow a steady repayment plan.

Be careful when searching for loans online. Find out how to know if your loan is legit so that you can confirm that the service is safe and secure. Do this due diligence before you fill out a loan application.

Now you can understand your car insurance payments a little better now. You can see why you pay as much as you do — and what you can do to pay less.

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