Auto Insurance Companies: Why Am I Being Blocked?

Auto insurance companies can be a nuisance, especially when they employ aggressive marketing tactics or continuously deny you coverage. In some cases, you may be receiving illegal scam calls, which can be dangerous and cost consumers billions of dollars annually. These scams can take the form of staged accidents, false medical claims, or agent fraud. To avoid this, you can change your phone settings to block unknown callers or send them straight to voicemail. Additionally, you can register your number on the National Do Not Call list to prevent unsolicited sales calls. If you continue to receive unwanted calls, contact your phone company and the police for assistance.

Too many tickets or accidents

If you have a history of several moving violations or accidents, insurance companies will consider you a high-risk driver. This label will likely result in higher insurance premiums or even a cancelled policy.

A moving violation is any infraction committed while your car is in motion. This includes speeding, running a red light, reckless driving, driving under the influence, and hit-and-run violations. Non-moving violations, such as parking tickets, usually don't affect your insurance rate.

The impact of moving violations on your insurance depends on several factors, including the severity of the offense, your state, and your insurer. For example, a DUI conviction will likely increase your insurance premium and may even result in policy cancellation. On the other hand, if you have a clean driving record, a minor speeding violation may not affect your insurance rate at all.

Additionally, the number of tickets or accidents matters. Generally, your rates may not increase after your first ticket, but they are likely to rise if you receive two or more tickets within three years.

It's worth noting that some states allow drivers to keep minor infractions off their record by attending traffic school or a driver safety class. Taking advantage of these opportunities can help reduce the impact of tickets and accidents on your insurance.

To find affordable insurance with a history of violations, it's recommended to compare rates from multiple insurance providers. Most states and car insurance companies stop charging higher rates for violations after three years, except for California, which rates DUIs for ten years.

Poor credit score

A poor credit score can have a significant impact on your auto insurance rates. In fact, it is one of the major factors used by underwriters when determining car insurance rates. A low credit score is often associated with a higher risk of filing insurance claims, and insurance companies typically charge higher rates to compensate for the anticipated claims. This correlation between credit score and insurance claims is backed by studies from the Federal Trade Commission and the University of Texas.

The impact of a poor credit score on insurance rates varies across states. In some states, such as Washington, D.C., New York, New Jersey, Texas, and Florida, poor credit can more than double your insurance rates. On the other hand, states like Washington have smaller increases in rates due to poor credit. It's important to note that California, Hawaii, Massachusetts, and Michigan prohibit or limit the use of credit scores in determining insurance rates.

The difference in insurance rates between individuals with excellent credit and those with poor credit can be substantial. On average, drivers with poor credit pay $144 more per month for full coverage and up to $200 more per month, depending on the insurance company. Over a year, this can amount to an additional cost of more than $1,500 for individuals with poor credit.

To improve your insurance rates despite a poor credit score, it is advisable to shop around and compare quotes from different insurance companies. Requesting a quote does not affect your credit score, and you may find that some companies offer more competitive rates. Additionally, reassessing your coverage and opting for a less comprehensive plan can also help reduce your insurance costs.

Improving your credit score is another effective way to lower your insurance rates. This can be achieved by making timely bill payments, reducing credit card debt, and keeping credit inquiries to a minimum. Monitoring your credit score regularly and maintaining a low credit utilization ratio are also beneficial.

Age

Teens are among the riskiest drivers to insure due to their lack of experience. Statistically, drivers aged 16 to 19 are almost three times more likely to be involved in fatal car accidents than any other age group. As a result, insurance companies often charge higher rates to teen drivers to offset the higher costs associated with their claims. The average cost of car insurance for a 16-year-old driver is $7,581 per year or $632 per month if they have their own insurance policy.

As drivers enter their early 20s, car insurance rates typically begin to decrease, provided they maintain a clean driving record. By the age of 25, drivers are no longer considered "youthful operators" by insurance carriers, and their premiums may see a significant reduction. Throughout adulthood, rates related to age tend to level out and remain consistent, as long as the driver has a history of safe driving and no insurance claims.

However, as drivers approach the age of 70, their insurance rates start to climb again. This is because, in addition to the increased risk of accidents, older drivers are more physically vulnerable to injuries. The recovery process tends to be slower, and injuries may lead to more costly medical care, which also increases the cost of medical payments and personal injury protection coverages.

While age is a significant factor in determining car insurance rates, it is important to note that other factors also come into play, such as location, vehicle type, driving record, credit history, and the type of coverage chosen. Additionally, gender can also influence rates, with men generally paying more than women due to riskier driving behaviors.

Location

Auto insurance companies consider location a major rating factor when determining whether to offer coverage to a customer. If you live in an area with a high rate of crashes, theft, or vandalism, you may be deemed a high-risk customer and blocked from obtaining insurance.

Insurers use data from previous claims and population information for your ZIP code to calculate the price of your policy. They assess the number of accidents, crime rates, and the average cost of vehicles in the area to determine the risk of insuring a vehicle. If you live in a high-risk area, insurance companies may view you as a liability and deny coverage.

Additionally, some insurers may not cover specific car models that are prone to theft in certain locations. For example, there have been instances where insurers have stopped accepting applications for certain model years of Hyundai and Kia vehicles due to increased theft losses for those models.

It is worth noting that laws regarding insurance rates and denials vary by state, and some states prohibit insurers from making decisions based on certain factors, such as gender. However, location is generally considered a valid factor in determining insurance eligibility and rates.

Type of car

The type of car you drive can significantly influence your car insurance rates. Insurance companies will consider the cost of repairs, theft rates, and comprehensive claims for similar models when determining your premium. If you own a luxury vehicle with advanced technology and safety features, you can expect to pay more for insurance as these cars are generally more expensive to repair or replace.

Sports cars are also deemed higher risk due to their association with racing, so insurance for these vehicles tends to be pricier. On the other hand, vehicles like minivans are considered lower risk and therefore have more affordable insurance rates. The brand of the vehicle is another factor, with Dodge having the highest average insurance costs and Mazda the lowest.

The age of your car is another factor that impacts insurance rates. Newer cars are generally more expensive to insure than older base models with high mileage. Additionally, insurance companies view inexperienced young drivers as riskier clients, so if you're under 25, you'll likely pay more for insurance. Similarly, insurance rates tend to increase for older drivers, especially those over 75, as they are considered higher-risk due to age-related factors such as decreased reaction times and vision changes.

Frequently asked questions