How to Use Changes in Your Driving Profile to Your Advantage

Your driving profile consists of various data points that help auto insurance providers determine your rates. Your profile will naturally change over time, for better or for worse. Depending on your driving and financial habits, you should weigh the advantages of short or long-term car insurance policies. This article will examine how one can use a change in their driving profile to their advantage. So, let's precisely what a driver profile is, how insurance companies use it to determine your monthly premium, and life events that might dictate which policy (6 vs. 12 mo.) is best for the consumer.

What is a driver profile? 

Insurance companies look at all (or most) elements of your driver profile to determine if they would like to provide you with coverage and, if so, at what price. Here are some of the most common factors that make up your driver profile:

• Age – Statistics show that younger drivers tend to get into more car accidents. As you age and become a more experienced driver, your driver profile risk will go down — up to a point. Once you reach 65 years or older, you might see your insurance premiums increase.
• Location - Where you live plays a significant role in both the type of insurance available to you, the minimum amount of coverage required by law, and the average premium you can expect to pay. Someone living in a zip code of a "safer" area (i.e., the suburbs) will pay less than someone living near a crowded downtown district, where a car parked overnight is subject to more risk.
• Marital Status - Single people pose more of a risk than married couples on the road. 
• Driving Record - Your driving record is perhaps the most critical factor in your entire driver profile. If you have a history of speeding tickets, DUIs, or other infractions, you will have to pay more for your car insurance. However, if you have several years with a "clean record" or no history of infractions, you can expect to see lower insurance premiums.
• Claims Record - Your claims record is slightly different than your driving record. If someone rear-ends your car and it is the other driver's fault, you will file a claim. Still, it will not usually negatively impact your driver profile despite the possibility of your insurance premiums being increased. Remember, every insurance company increases rates differently, especially in no-fault incidents, so it's best to check this out when purchasing your policy. It's always best to report an adventure, even if the damage is minor. You're afraid your premium might go up, and even if you're worried, your policy will be canceled. If you do not report an incident and the other party decides to come after you in the future, you will be worse. It will be more difficult for your insurer to represent you due to a lack of evidence. 
• Credit History - Your credit reflects your financial responsibility and your propensity to pay your bills on time. Insurers tend to favor people with high credit scores as they are viewed as more responsible.
• Previous Insurance Coverage - If you have a history of maintaining insurance without lapses in coverage, it will positively impact your driver profile.
• Vehicle Type - Insurance companies also factor in the type of car you drive and how you drive it. The way someone drives a sports car is typically different than how they might go a minivan. Vehicle type can also affect the risk of theft or vandalism.
• Annual Mileage - How often and how far you drive both affect your driver profile. The more you go, the greater the risk that you will get in an accident.

Strategies to Take Advantage of Changes in Your Driving Profile

As you can see, there are a lot of different factors that go into your driver profile. Some are within your control, while other factors (like age) are entirely beyond your control. In any case, you should always keep track of your driver profile's status to know which policy is best. 

Did you know you can order a copy of your driving record, known as an MVR (motor vehicle report), from your local Motor Vehicle Division or Dept of Motor Vehicles? There are also 3rd party websites like MVR Online that offer this service and monitor your record automatically. With a copy of your MVR, you'll have a better idea of what insurance coverage should approximately cost. 

When you notice changes in your driver profile, you have a few options to take advantage of the situation. After a difference in your profile, you can contact your insurance provider towards the end of your current benefit period and negotiate a lower premium in the future. Though not all providers will lower your rates, it is always worth the effort.

In the first strategy, let's continue with the age scenario. Many insurers lower the premiums for experienced drivers 25 years and older. If one has been driving from 16-18 to 25 years old, they are no longer considered a new/young driver. So, if a driver is 24 and will be 25 in a few months, and they're due to renew an auto insurance policy, it's best to take out a six-month approach. Why? Because once they're 25 and the policy expires, they'll be able to renew for one year at a lower premium.

Another way to take advantage of your driving profile changes is to monitor violations on your driving record. After a few years of yearly policies, your infraction a long time ago might only be a few months away from being dropped from your driving record. Instead of renewing for a whole year, take a 6-month policy. Once they dismiss the infraction, they restart a new policy with the benefit of a lower premium.

Things to know

Take advantage of positive changes in your life to reevaluate your insurance entirely. Take the opportunity to check out different providers to see who can offer you the lowest price, preferably without losing your current benefits. Many insurance providers will give discounts on multiple policies like auto and home or renter's insurance. 

Again, many factors like those listed above play a role in your driver profile. Always keep them in mind, and see if a change will affect your rates. 

Did you recently move out of the city because you'll be working from home now? A reduction in total driving miles or a change in your zip code warrants a phone call or email to your insurance company. 

Did you just get married? Congratulations on no longer being single! Now celebrate with a joint policy with a lower premium.

Nobody likes car loans, and it's always worth celebrating when that falls off your list of debts! Those without a car loan no longer need collision or comprehensive insurance. If you don't have an expensive car, you might now be better off with minimum liability insurance.

Did you pay off those student loans or a mortgage? Monitor your credit, and once you see a higher score, contact your provider, and ask if they can reevaluate your profile.

Lastly, you can likely secure a lower rate by letting time pass and ensuring that you keep a clean driving record. So be safe out there, take caution, and keep a clean profile!

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