Iowa Car Insurance Rates
In Iowa, auto insurance companies are regulated by the Iowa Insurance Division to ensure that consumers are not being discriminated against in the form of predatory rates. If you are shopping for auto insurance in the state of Iowa, any company licensed to do business must file their rates with the Division.
By making this a requirement, consumers have peace of mind in knowing that they will pay fair Iowa car insurance premiums.
While every rate that is charged by licensed Iowa insurance companies must be approved, some companies offer more affordable rates than others. This is because some companies have a larger customer base that allows for more room in the rating system. Other companies have defined a very narrow target market of people that they want to sell to.
To compete in this target market, the company may have competitive prices for specific groups in Iowa and then less competitive rates for other groups. To identify the niche audience of a company, you need to take the time to request quotes from each company.
When a quote with one insurer is significantly higher than other quotes you have received, you will be able to tell that the company is priced out of your market or rating group.
If you are interested in getting the best rates from a reputable insurer, remember that you should always put price second. Just because you are shopping for coverage in the 4th least expensive state in the nation does not mean you do not need to take your time to price the products.
You will need to find an insurer that is stable in the market, dedicated to quality service, and competitive if you want to get what you are paying for in the end. If you would like to better understand Iowa car insurance rates and how to find the best Iowa providers, read on and learn everything that you need to know.
And be sure to use the FREE comparison tool above to start shopping for car insurance!
Understanding the Insurance Industry
Price should always be the last factor to consider when you are choosing an insurance company. The main reason why price is not always important is because any company can saturate the market by pricing their products very low, but that does not mean the insurer will stay in business.
To understand why financial stability is so important, you must understand how the industry works.
Insurance is based on risk, and premiums are collected based on many risk factors. People who are considered more likely to file a claim will pay higher premiums. If these individuals do not pay their part into the "insurance pot", the company will not have the money that they need in reserves to cover projected claims for the year.
The company will not have the money that they need to buy reinsurance or catastrophe bonds to pay for catastrophic losses and standard claims. This results in denied claims and delayed payments. This is why financial stability is the first thing that all consumers in Iowa should consider.
How to Determine Financial Stability
Before you begin to compare auto insurance rates, you should check the licensed company's current financial ranking. Luckily for consumers, financial ratings of companies in the financial sector are public record. There are a handful of independent companies that are dedicated to assigning letter grades to each insurer after reviewing their debt, their financial statements and other records.
Some of the most well-known companies include A.M. Best, Moody's and Standard & Poor's. Be sure that you review the rating system of each agency before you rely on the grades to make your decision. When you select a company classified as secure, you can trust that you are buying coverage from a reputable provider.
Understanding How Your Premiums Are Calculated
Have you ever wondered why your best friend's insurance rates are as much as 30 percent lower than yours? Comparing your insurance rates to the rates charged to a friend's household is never going to shed light on whether or not you need to find an insurer. This is because no single person has all of the same rating factors.
So many different indicators are used to determine if you are a risk that when they are also considered, there is no way to do a fair comparison. If you would like to understand which factors affect your premiums the most, here are some of the industry standard factors to keep in mind:
Age and Gender
Two very important factors that work hand-in-hand with one another are age and gender. In a general sense, younger drivers pay more for insurance than older drivers. To expand on this, younger males pay more than younger females.
This is because young drivers tend to file more auto insurance claims that older and more mature drivers. As you age, your rates will go down. There is a myth that your premiums go up as you age, but this is not always true. Once you reach 55 or 60, depending on the insurer, you may be able to take Mature Driving courses to receive a credit that will offset the hike in the rates that come with becoming a senior.
Driving Experience and Age Licensed
Age and age licensed are two very different rating factors. While age is important, if you have more years of experience behind the wheel than someone who is in your same age bracket you will pay lower rates. As you request auto insurance quotes in Iowa, be sure to put your original age licensed.
If you have an old license from another state or country, provide the information so that you receive more experience credit.
Vehicle Classification and Safety Record
The type of car that you drive will also affect your rates. Contrary to popular belief, the color of your vehicle and even the price of the vehicle does not affect your rates when you are buying standard Iowa auto insurance. What does affect the rates for a vehicle is its safety record and classification.
Vehicles carry higher rates when the claims statistics show that they are unsafe or cause significant damage or injury in accidents. When a vehicle is installed with safety equipment, you may receive some premium credits.
Your Credit Rating
Credit-based insurance scoring is allowed in the state of Iowa. This is a controversial rate consideration because many believe that credit does not have anything to do with claims and risk. Based on the research conducted, people with excellent credit are less likely to file a claim.
Conversely, drivers with poor credit are more likely to file high-cost claims.
Insurance scores are calculated using a tier system, which uses payment history, bankruptcies, debt ratios and on-time payments to assign a tier. If you are not sure of your score, order it from all three credit reporting companies for free through the Federal Trade Commission. Dispute any errors and wait for corrections to be reported before you begin shopping for coverage.
How and How Often You Use Your Car
Vehicles are not always driven for the same purposes. The reason that you drive your vehicle regularly is called vehicle usage. Usage and annual mileage can put you in a different risk group and affect your rates. If you drive around for pleasure, you are in less risky conditions than you would be if you were commuting. You also are driving under less stress if you are driving when you want to drive and not when you have to report to work or school.
There are several different annual mileage rating brackets. If you are in a low rating bracket, typically under 5000 miles per year, you will pay lower premiums than those who drive the standard mileage. This is because the less that you are on the road, the less exposure you have to risk.
Where Your Vehicle is Parked
There are rates in the state of Iowa, but these base rates are also affected by your zip code. The garaging territory, or where your vehicle is parked on a regular basis, can affect your premiums. This is because some areas have more crime than others, and some areas with higher populations have a higher rate of accidents.
If you are more likely to file a claim, you are likely to pay higher premiums. You may be able to receive discounts off of comprehensive cover if you live in a gated community or your vehicle stays parked in the garage.
Now that you know how your rates are calculated, it is time to start shopping.
Always consider customer service and financial stability before you even begin to consider cost. When you are ready to see how much you will pay for coverage if you switch insurers, use an intelligent online rate comparison tool that will give you access to several rates by entering your information only one time. Once you research the company, you will be ready to make a decision.
Enter your ZIP code into the below FREE comparison tool now!