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How Car Insurance Premiums Are Calculated in Alabama and Louisiana 

You have to have car insurance to legally drive in Alabama and Louisiana (and in most U.S. states). So you call or visit your car insurer, answer a few questions, and get a bill that states what you’ll pay for your auto insurance premiums. 

You’re likely to notice that everyone’s rates seem to be different when you compare your bill to what friends and family pay. So what are the determining factors companies use to set car insurance premiums? Is there anything you can do to lower those rates? 

Keep in mind that your insurer’s goal is to pay less to you in claims than you pay in premiums. The company can’t predict the future, but it can use a variety of factors to decrease its odds of losing money on you. 

What are the major factors Louisiana and Alabama insurers consider, and what can you do about controlling what you’re likely to pay? Here are some of the items the insurance underwriter will consider. 

Your Driving Record 

This is both one of the major factors considered and the easiest to control. Insurers make the assumption that past activity is the best guide to future results. In other words, if a driver’s record shows recklessness behind the wheel, it is a pattern that may continue. 

Motorists in Louisiana and Alabama will pay the highest premiums if their record shows multiple moving violations or accidents. Even one driving under the influence (DUI) violation can either raise your premiums considerably or leave you without insurance at all. 

If your record shows you are a safe and careful driver, your rates will be lower. If, however, your driving record is already dented, you can earn lowered rates over time as your negative points fall off your record — provided your driving improves in the meantime. 

Your Age 

Insurance underwriters have found that, in general, younger people drive with less caution and get into more accidents than more mature drivers. This is partly due to the fact that they have less experience behind the wheel, but also because many young people are just more impulsive and less cautious than older folks. 

For that reason, Alabama and Louisiana drivers under age 25 tend to pay much higher premiums. If you or a loved one is a teen driver or a young adult, there’s not much you can do about this pricing factor, except to literally “age out” of the cost. Just make sure you drive carefully until you hit age 25, or you’ll continue to pay top dollar for your car insurance even after reaching that milestone. 

Your Gender 

Auto insurers look at stats that indicate males typically get more tickets and are in more road accidents than female drivers. For that reason, men and boys tend to pay higher insurance rates, other factors being equal. 

Your Location 

Some LA or AL zip codes tend to experience more acts of vandalism and car theft than others. Additionally, a zip code in a congested area may see more accidents and claims. If you live in such a location, you’re likely to pay more for coverage. There’s not much you can do about this factor, except to change addresses. 

How You Use Your Car 

How many miles a year do you typically drive? How far do you commute? Do you use your car for your job, such as by being a courier or rideshare driver? 

Your insurer will calculate that the more time you spend on the road, the likelier it is that you’ll eventually be involved in an accident. So for that reason, drivers who use their vehicles the least tend to pay the least for car insurance

The Car You Drive 

You could get insurance quotes for two different vehicles, and find you’ll pay two very different rates in Alabama and Louisiana, even though all other factors are identical. That’s because certain vehicles tend to cost insurers more in claims than others. 

That’s for a variety of reasons. Some vehicles tend to get stolen more than others. Some cost a lot more to repair. Some, such as sports cars, tend to attract more speeding tickets than less powerful rides. 

That’s why it makes sense to consult your auto insurer for a cost quote even before you’ve made the final decision to purchase a particular car model. You might change your mind when you find out what it will cost to insure in Alabama and Louisiana. 

man standing next to blue car

Your Deductible 

This is one of the cost factors over which you have the most control. The deductible is the dollar amount you agree to pay before your insurance company pays the rest of a valid claim. The higher the deductible, the more you’ll pay in the event of an accident or other claim event — but the less you’ll pay in premiums. 

It makes sense when you think about it. If the insurance company has to pay less for a claim, it can reward you with lower premiums. 

Just make sure you don’t agree to a deductible that’s so high that you end up unable to afford your out-of-pocket responsibility if you do have a claim. That could mean having a car out of service until you can figure out how to come up with your deductible payment. 

Your Credit Rating Affects Your Insurance Premium in Al or LA 

Alabama and Louisiana drivers with poor credit ratings can pay more for their auto insurance. That’s because your insurer makes the judgment that someone with a low credit score might, at some point, be unable to pay their premiums when they are due. 

Therefore, keeping your credit rating as high as possible can help control what you’ll pay for car insurance. 

Consult a Louisiana or Alabama Independent Auto Insurance Agent  

There are additional factors that can determine what you’ll pay in premiums. For instance, if you insure more than one vehicle or can bundle your coverage with other forms of insurance you already carry, you might earn significant discounts. Your insurance agent will have details. 

You can also maximize your premium savings by consulting an independent agent. A car insurance agent who works for only one insurer can only offer you rates from that carrier. An independent agent, on the other hand, has contracts to sell coverage from several carriers. That means the independent agent can go shopping for the best rates available from multiple sources. Finding competitive rates and coverages could make a big cost difference and help you find exactly what you need. 

Find Affordable Auto Insurance in Louisiana and Alabama Today 

Your independent agent from USAgencies can help you find the best possible deals on car insurance in Louisiana and Alabama. Simply call us at (800) 420-3712 or fill out our brief online form to get a quick quote. We’d also love to meet you in person. Find a USAgencies location near you