Several factors influence the overall cost of car insurance, and it is up to you to keep an eye on these costs so you can buy the best car insurance for yourself. Some of these factors are major like your insurance coverage type and your driving record, and even some minor ones like where you park your car.
All companies don’t use the same parameters. Therefore, we have compiled a list of the factors that commonly determine your auto insurance policy’s bottom line. These factors include:
· Your Driving Record
It’s a given that the better your driving record is, the lower your premiums will be at the end of the day. You’ll likely pay more if you’ve been involved in accidents or have committed serious traffic offenses. You may also have to pay more if you are a new driver and don’t have any prior insurance track record.
· How Much You Use Your Car
The more miles you drive, the higher your risk of getting into accidents. You’ll end up paying more for your auto insurance if you drive your car for work or use it to commute long distances. If you only drive occasionally, which is sometimes referred to as ‘pleasure use’ by some companies, you will end up paying less for your auto insurance policy.
· The Locations Where You Drive Your Car
Drivers in urban areas tend to pay a higher price for auto insurance than those drivers who drive in small towns, because of the higher rates of theft, vandalism, and accidents they find themselves in. The place where you park your car in, i.e., a secure garage, out on the street, etc., along with what anti-theft features are installed on your car will impact the bottom line.
Some of the other factors that may affect your auto insurance’s premium can vary from one area or state to another are the medical care and car repair costs, the cost and frequency of litigation, weather trends, and prevalence of auto insurance fraud.
· Your Age
In general, mature drivers tend to be involved in far fewer accidents than less experienced drivers, especially teenagers. Insurers are generally going to charge more if teenagers or young people below the age of 25 drive your car.
· Your Gender
Statistics show that women tend to get into far fewer accidents than men, have fewer driver-under-the-influence accidents (DUIs), and, most importantly, are involved in less serious accidents than men. So, if everything is equal, women will pay less for auto insurance than most males, and that is something insurance companies take into consideration.
· The Car You Drive
Another major factor involved in the cost to insure your car is the overall price of your vehicle. Some of the other variables included are the likelihood of theft, the car’s engine size, the cost of repairs, and the car’s overall safety record. Automobiles with high-quality safety equipment may qualify for premium discounts more often.
Insurance companies look at how safe a vehicle is when being driven, how well it protects its occupants, and how much potential damage it can inflict on another car. If a specific vehicle model has a higher chance of taking damage in an accident, an insurer will charge more for liability insurance.
· Your Credit-Based Insurance Score
Your credit-based insurance score is like your credit score, acting like a tool that predicts the likelihood of your filing a claim and the overall cost of that claim.
· The Type and Amount of Auto Insurance Coverage
The limits on your basic auto insurance, your deductible amount, and policy options that are prudent for you to have, like collision coverage, also affect how much you will pay for coverage.
· Never Race or Religion
When it comes to your auto insurance, it is illegal to use race or religion to set insurance rates, and that is something that insurance companies know very well.
What you pay for your auto insurance coverage is determined by several factors. We advise that you learn all about these factors when you’re shopping for auto insurance policies. Knowing more about the variables affecting coverage puts you in a better position for buying the right auto insurance for your car. Most people don’t have a clue about their auto insurance policy or which factors influence its cost, and that is why we decided to even the playing field by providing a list of variables. Keep in mind, most of them are in your control, and you can shop smartly for auto insurance by keeping them in mind.
The next time you shop for auto insurance, make sure you know about the factors determining the cost of an auto insurance policy. It will allow you to purchase the policy best suited to your requirements.