Why Does My Car Insurance Plan Cost More Than My Home Insurance?

Why Does My Car Insurance Plan Cost More Than My Home Insurance?

Mar 30, 2022


Why Does My Car Insurance Plan Cost More Than My Home Insurance?

People sometimes get confused when they find out that their homeowners' insurance will cost them less than their auto insurance. You would think the higher value item would cost more to insure. In the world of insurance, this isn't true. When it comes to insurance, your level of potential risk will take precedence to overvalue. The more risk you carry, the higher your premiums will be. This means that it will normally cost less to insure than your car for as much as your home is worth. Value is always a factor, but in this case, the level of risk is most important in terms of figuring your premiums. Here's a look at why auto insurance is costlier than home insurance.

Mobility Carries More Risk

Being mobile increases your risk. Since your home doesn't move, it carries less risk than your cars. Your cars travel at high speeds through construction zones and city streets packed with cars and people. The more miles you put on your car, the more likely you will be involved in an accident. Even if you are a great driver, your risk of having an accident increases every time you get behind the wheel of a car and take it out on the street.

More Value Doesn't Necessarily Mean More Risk

Your home is one of your biggest investments. Much of your savings are invested in the equity of your home. The fact is, even though your home is worth much more than your vehicle, the level of risk it carries is minimal compared to the risk you carry with your car. Even if you factor in the risk of earthquake or hurricane damage, the level of risk is much smaller than the amount of risk you experience with taking your vehicle for a drive on a Sunday afternoon.

Increased Probability for Various Types of Liability

With your car, you are also at risk for more types of liability. If you have an accident with your car, you will be responsible for both property damage and personal liability damages. While an accident may occur in your home or on your property, the risk is considerably less than when driving your car. You drive your car every day. However, a visitor may come to your home once or twice a month. Fewer visitors equals much less risk. Since your home is immobile, it faces fewer risks. Your car, on the other hand, faces risk every time you turn a corner. Plus, your car has the added possibility of being driven by a teen driver, which increases the risk associated with it.

Don't wait to get the answers you need when you have questions about your homeowners' or auto insurance. Contact our insurance experts at Bell Black Insurance at your earliest convenience. We can help clear all your confusion regarding auto and home insurance policies and ensure you fully understand how your insurance works. We will also help you figure out how your premiums are calculated. Insurance is much easier to understand if you can follow how the process works. If you want to be fully informed, talk to one of our insurance professionals today!