Why do I pay more than my friend for car insurance?

Assuming that you and your friend have exact duplicate vehicles with exactly the same coverage, are the same age, same sex, have exactly the same driving record, drive your vehicle from the same area to the same area, then it would be a matter of one insurer is giving better rates then another. How to get that better rate? Talk to your broker or agent.

Insurance companies look at the specific model of vehicle you drive. There are so many variations now, that the vehicle identification number (VIN) is the only sure way of saying one vehicle is rated the same as another. Your vehicle may not have an alarm that immobilizes the engine, or you may have more added features which increases the value of your vehicle. An example, is you may have put in a higher than usual, value sound system. Most insurance companies use the CLEAR system to rate the vehicles, so there is usually no difference between one company's rate group and another, for exact duplicate vehicles.

Your driving record is a big part of the equation. Driving records include how long you have had your license, and what class of license you have. The length of time and whether or not your insurance has been consecutive, is also considered. If you have had an accident, and whether or not you are rated "at fault" is determined. Do you have tickets or convictions, and what type of tickets you have, can result in a surcharge. Underwriters use information available to them to determine your history. If there is an error in this information, then you will not receive the rating you deserve. How do you know if the information is correct? Talk to your broker or agent.

Do you have someone in your household who is affecting your rates? The insurance rates are determined by the most expensive vehicle being cross referenced to the driver with the least experience, or poorer driving record. If you live with your brother, he is licensed and does not have a car, then his record could be increasing your premiums. Your friend with lower premiums may live alone.

Some areas have a higher risk level. The territory you will be rated on is determined by your postal code. Statistics have shown that certain locations have more auto theft, vandalism and injury collision claims than others. Living across the street from your friend, could change the postal code and the subsequent rating.

Your friend may have purchased his insurance on-line. Your friend will have to phone a call centre to get information or changes done to his policy.

Your credit score could be affecting your overall premium. Credit scores can generate a surcharge or give you a discount. The difference could be as much as 25%.

Your friend may be employed in an occupation that statistically reduces his risk. Some lower risk groups include firefighters, paramedics, doctors, police officers and nurses. You may qualify for more discounts, then you currently receive. Check with your broker or agent, to be sure that all your information is current.