What affects Car Insurance Premiums

There is a common misconception among consumers that everyone should pay the exact same rate for automobile insurance. When shopping around for quotes, often motorists are aghast at the wide spectrum of variations between what they pay and what their buddy from down the block is charged. In reality, there are numerous factors that influence the amount of premium that is charged for auto insurance. These reasons usually fall into three main categories.
The first determining factor is directly related to the type of vehicle that a person drives. Each individual car, truck, van, and SUV is assigned into a vehicle rate group. Simply put, the higher number of the rate group, the higher premiums that will be charged. These rate groups are determined by several features of the vehicle. For example, sports cars are usually more expensive to insure than family sedans because parts or repairs are more costly, they may be at greater risk for theft or vandalism, and they may be involved more often in motor vehicle accidents.

Brand new vehicles are often allocated a set rate, and then after a period of time; perhaps a year or two, the vehicle is reviewed to see how well it performs in each category. If it seems that this type of automobile is involved in substantially more accidents than experts at first estimated, the rate, and thus the premium will be increased.This is a rating method that is not widely known among the public. A consumer may own a certain brand of vehicle and then trade it for one that is similar. When they visit their insurance agent to transfer the insurance, they are shocked to learn that their newly acquired vehicle costs hundreds of dollars more than their old one.

Each individual driver impacts the rate that they are charged for insurance. Again, no two people necessarily pay the same for their insurance policy. Some aspects can be changed; however, there are a few that you can do absolutely nothing about.
The age, sex, and marital status play a role in working out the final cost. Very young drivers who have just obtained their license and very elderly drivers who may not possess the necessary reflexes and reaction times that they once did, will be charged more than middle aged driver. It has been statistically proven that males are a higher risk behind the wheel than their female counterparts. Men are more likely to drive recklessly, speed, and be involved in more severe accidents than women. More men than women tend to drive under the influence of drugs or alcohol. While this may not always be the truth, unfortunately this is how society is viewed in terms of car insurance.

There are some factors that an individual can change if they desire to pay lower insurance premiums. If a motorist resides in a big city centre that is privy to a high congestion rate, then this will most likely cause their yearly rates to increase. A large city means more drivers on the road and a higher risk of collisions or accidents. This can be remedied by moving to a different town, city, or even state; not necessarily the best resolution. It’s not easy for a person to pack up and move halfway across the country to save a few dollars on car insurance. The distance driven on an annual basis combined with the use of the vehicle can alter the premium for a motorist. Commuting over a long distance to work exposes drivers to a higher chance of an auto claim or accident. Using a vehicle for running the odd errand across town will be cheaper.

Perhaps the most influential reason for higher insurance rates is the driving habits of the individual motorist. Each ticket, driving infraction, suspension, or claim can be the difference between what one person pays and what another is charged. If you have several speeding tickets, have been charged with a DUI, or deemed at fault for an accident, your insurance policy will be surcharged and the rates could skyrocket. All of these infractions reflect on the habits of the driver and the probability that they will have a claim detrimental to their insurance company. This is why it is so important to obey all traffic laws and to always drive attentively. Tickets and accidents can affect your driving record for several years and it will take time to see a decrease, as long as you keep driving safely. The more experience you have driving, the more your rates will be lowered. If you have been driving for 30 years without a single ticket or accident, you will benefit from your safe driving.

Many insurance companies offer discounts that can drastically improve the premium that you pay for your auto policy. Such discounts are offered if you have multiple vehicles on a policy or if you place your home or life insurance with the came company. Good driver and good student discounts are also offered. By purchasing a vehicle equipped with an anti-theft device, you can lower your premiums as well. Your automobile is less likely to become a target of thieves and vandals. Before obtaining your driver’s license, you may want to consider enrolling in a driver’s training course. This can also help to lower your premiums.

One Response to “What affects Car Insurance Premiums”

  1. Carl Hisserich says:

    Whether or not you have insurance, shopping around will benefit you. Take your time and do a little research on all your options, and make sure you take your situation into consideration.

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