Safe drivers pay less for auto insurance. Right? Theoretically, yes, but auto insurance premiums can be impacted by many factors that go beyond the policyholder’s driving record. Exactly which factors are used varies, both because of differences in insurers’ underwriting formulas and because of state laws that restrict how car insurance companies can determine rates. Hawaii has some of the strictest anti-discrimination auto insurance laws in the country.
Here’s a look at what auto insurance can use to calculate rates in Hawaii and other places.
- Driving History
Auto insurers routinely use driving history to determine car insurance rates. As a result, if you have a lot of tickets or crashes on your driving record, you can expect to pay higher rates.
Many auto insurers use location as a key factor in determining rates. Depending on the state and even the ZIP code where you live, your rates may be higher or lower. This is because many risk factors – including bad weather, crime and crash rates – vary from region to region. State auto insurance requirements can also have a big impact on the average cost of insurance.
According to Bankrate, the average cost for minimum coverage in Hawaii is $354 in 2021. That’s a lot lower than the cost in many states. In New York, the average cost is $1,062.
- Your Vehicle
The vehicle you drive can impact both safety issues and repair costs. Because of this, your vehicle’s make and model will impact your car insurance premiums.
According to Property Casualty 360, the Maserati Quattroporte Is the most expensive car to insure in 2021. Vans tend to be cheaper to insure, while electric vehicles are more expensive to insure because of the repair costs.
- Your Coverage
The minimum amount of insurance required is determined by state law. This year, in Hawaii, drivers are required to carry $10,000 in personal injury protection. They also need to carry bodily injury liability with limits of at least $20,000 per person and $40,000 per accident, and they need property damage liability with limits of at least $10,000.
Drivers may also wish to purchase higher limits and additional coverage types for an additional cost.
- How Much You Drive
As the number of miles you drive increases, so does the risk of a crash. As a result, you can expect to pay higher insurance premiums if you drive a lot. Insurers also ask about why you drive – for work or for pleasure, for example.
Studies have show that women have fewer accident claims than men. As a result, many insurance companies charge women less for car insurance. However, some states prohibit insurers from using gender to calculate premiums. Hawaii is one of these states. In Hawaii, your gender does not impact how much you pay for car insurance.
- Credit Score
Credit scores are used for more than determining interest rates and loan approval. Some insurers use a driver’s credit score as one factor when determining rates. However, some states ban this practice, and Hawaii is one of them. In Hawaii, auto insurance companies cannot charge higher rates based on your credit history.
Insurers may use other factors when determining rates. In some cases, an insurer may even decide not to offer coverage. However, according to the State of Hawaii DCCA, insurers in Hawaii “may not refuse to insure you on the basis of your race, creed, ethnic extraction, age, sex, length of driving experience, credit bureau rating, marital status, residence or physical handicap.”
Wondering if You’re Paying Too Much?
If you haven’t shopped for auto insurance coverage in a while, you may want to check your rates. If you now work from home, and you drive fewer miles than you did when you were commuting to work, be sure to let your insurer know – it might make a difference.