The Crucial Factors Which Dictate Your Auto Insurance Premiums
Auto insurance has premiums that are determined by the risks associated with the individual policyholders. The higher your risks, the higher your premiums will be. Here are the crucial risk assessment factors used by auto insurance firms to determine your insurance premiums.
Your residence and driving location
The likelihood that you'll be part of a motor accident is largely determined by where you habitually drive your car. If you drive around in a large city or highway for example, you have a higher chance of being involved in a motor accident, as these areas typically have more vehicles and a large number of pedestrians. Therefore, if you want a low rate based on your area, you'll need to live in a low traffic area that has a low history of motor accidents.
Your vehicle model
Auto insurance companies also assess how safe your car is based on the model and included features. Insurance providers use this information to research the historical accident statistics for your model of car and the features installed by its manufacturer. Consequently, if your car includes several safety features, then your premiums will be even lower.
The age and price of your vehicle also determines your premiums. For example, the newest and most expensive vehicles attract the highest premiums since it would be costly to replace them in case of an accident. Consequently, you should be prepared for a higher premium if you have a new sports car.
Your age, sex and marital status
Statistically, drivers who are under 25 years of age are involved in more accidents than drivers who are above this age group. Therefore, if you're between the ages of 16 and 24, you should expect to pay higher premiums than a driver that's between 25 and 40 years old.
Married people have also been statistically proven to be involved in fewer accidents than their single counterparts. A ring on your finger, therefore, should win you low premiums.
Additionally, insurance companies tend to favor women, due to the overwhelming statistical proof that they are safer drivers than men. Due to this, men often pay 40% higher premiums than women.
Your driving record
Your driving record will also be thoroughly assessed by an auto insurance company. Once they've gathered this information, your insurance provider will likely offer you a lower premium if you have a safe driving history.
To be favored as a low risk driver, you need to have several years of experience behind the wheel and a clean driving record. Consequently, things like speeding tickets, past accidents and claims will unfavorably put you in the high risk category and raise your premiums.
Your driving habits
Your premiums will also be determined by how often you drive, where you drive to, and the length of time you spend behind the wheel. The longer you drive, the higher the chances of having an accident and increasing your premiums. Therefore, if you often drive for long distances, you should expect to pay higher premiums than someone who doesn't drive to work on a daily basis.
Your auto insurance premiums are also significantly determined by other general factors like insurance market trends, government policies, and taxes, so always look around to see what's best for you.
References
http://www.dmv.org/insurance/car-insurance-rate-factors.php
http://www.ibc.ca/en/car_insurance/introduction/How_Auto_Rates_Calculated.asp
Your residence and driving location
The likelihood that you'll be part of a motor accident is largely determined by where you habitually drive your car. If you drive around in a large city or highway for example, you have a higher chance of being involved in a motor accident, as these areas typically have more vehicles and a large number of pedestrians. Therefore, if you want a low rate based on your area, you'll need to live in a low traffic area that has a low history of motor accidents.
Your vehicle model
Auto insurance companies also assess how safe your car is based on the model and included features. Insurance providers use this information to research the historical accident statistics for your model of car and the features installed by its manufacturer. Consequently, if your car includes several safety features, then your premiums will be even lower.
The age and price of your vehicle also determines your premiums. For example, the newest and most expensive vehicles attract the highest premiums since it would be costly to replace them in case of an accident. Consequently, you should be prepared for a higher premium if you have a new sports car.
Your age, sex and marital status
Statistically, drivers who are under 25 years of age are involved in more accidents than drivers who are above this age group. Therefore, if you're between the ages of 16 and 24, you should expect to pay higher premiums than a driver that's between 25 and 40 years old.
Married people have also been statistically proven to be involved in fewer accidents than their single counterparts. A ring on your finger, therefore, should win you low premiums.
Additionally, insurance companies tend to favor women, due to the overwhelming statistical proof that they are safer drivers than men. Due to this, men often pay 40% higher premiums than women.
Your driving record
Your driving record will also be thoroughly assessed by an auto insurance company. Once they've gathered this information, your insurance provider will likely offer you a lower premium if you have a safe driving history.
To be favored as a low risk driver, you need to have several years of experience behind the wheel and a clean driving record. Consequently, things like speeding tickets, past accidents and claims will unfavorably put you in the high risk category and raise your premiums.
Your driving habits
Your premiums will also be determined by how often you drive, where you drive to, and the length of time you spend behind the wheel. The longer you drive, the higher the chances of having an accident and increasing your premiums. Therefore, if you often drive for long distances, you should expect to pay higher premiums than someone who doesn't drive to work on a daily basis.
Your auto insurance premiums are also significantly determined by other general factors like insurance market trends, government policies, and taxes, so always look around to see what's best for you.
References
http://www.dmv.org/insurance/car-insurance-rate-factors.php
http://www.ibc.ca/en/car_insurance/introduction/How_Auto_Rates_Calculated.asp