Adulting 101: My car didn’t change but my insurance rates did. Why?

Insurance spreads risk among many people so no one individual has to go it alone if they suffer a serious loss. That's great for your financial peace of mind, but it also means giving up a certain amount of control as part of a risk pool. There are dozens of reasons your car insurance rates might change. Some depend on you. Others reflect your pool and loss experience on the roads where you live. (More about that below.)

The company you insure with matters, too, even though all insurers rely on roughly the same sets of data. That's because each company uses its own formula to assess risk and tailor eligibility to the people it serves. Regardless of the company, though, you can almost always improve your rate when you focus on these four areas:

1. Your driving record. Keep your driving record clean – no tickets, no at-fault accidents. Some insurers, including PEMCO, offer minor ticket and accident forgiveness for people who can avoid either for five years. You'll also save when you keep claims to a minimum. For example, some drivers avoid turning in claims for little things like windshield chips so they won't have multiple claims on their record if they ever need to use their insurance to cover a significant loss.
2. How far you drive. The miles you travel affect your likelihood of an accident. If you've started telecommuting, using mass transit or biking or walking to work, let us know. Your reduction in miles driven may bump you to a lower usage category and save you money.
3. Your car. You'd expect that the more your car is worth, the more it costs to insure. And that's true. But insurance prices are even more nuanced than that. Sports models with features like turbo-charging correlate with higher accident rates and cost more to insure. Some cars are pricier to repair than others because of their design, while still others are thief magnets and more likely to be stolen. If you're car shopping and stuck between two models, your insurance agent might be able to help break the tie if one car costs significantly less to insure!
4. Your deductible. Before your insurance can pay a comprehensive or collision claim, you'll be asked to pay a portion of it through your deductible. If your finances could absorb a relatively small claim, consider raising your deductible to at least $1,000. Also, you can consider dropping those coverages on older cars that are worth little more than your deductible. Ask us and we can run the numbers to help you decide if it's worth it.

So what are some of the things you can't change? Your age, for starters! Teen drivers, for example, have the highest per-mile crash rate of any demographic group. Even the most cautious teen will pay more for insurance than an older driver with a comparable driving record. That doesn't always feel fair on an individual level, but in a risk pool, it would be unfair to ask seasoned drivers (safer as a group) to subsidize younger drivers (riskier as a group). The good news: In your mid- to late 20s, assuming all else remains unchanged, young driver rates begin to drop.

Other uncontrollables: Stubbornly high rates of distracted driving, despite tougher texting and driving laws; rising car repair costs and increasing medical costs. Sometimes the uncontrollables can save you money, too. For example, since the COVID-19 pandemic, traffic density and accident rates have dropped. That's allowed us to credit all drivers 15% (regardless of the number of miles they drive individually) beginning in April and continuing at least through October. We'll continue to monitor traffic trends so we can accurately match rates to risks.

If you're concerned about your premium, and especially if you're having trouble related to COVID-19 financial setbacks, let us know at 1-800-GO-PEMCO or chat online with one of our agents using your pemco.com account. We may be able to help with flexible payment arrangements tailored to your situation.