Factors That Determine The Rates For Your Auto Insurance
If you''re going to drive a vehicle, it's important that you and your automobile are properly insured. While there are laws in almost every state requiring a minimum amount of liability insurance, it''s also the smart choice. How much is car insurance anyway, is most likely your next question. There are many different factors that determine what your insurance premiums will cost.
First and probably most crucial is you're driving record. Factors that affect insurance rates are moving violations, driving while intoxicated, or numerous fender-benders. Any combination of these and you can expect to be in a higher risk category. Most companies are coming out with good driver discounts or accident free discounts so the longer you go without tickets or accidents, the more you save.
Next your potential insurer is going to want to know your age. A young driver, whether male or female, will be charged more for insurance coverage because they are a greater risk. The difference in premium between someone age 27 and another age 17 can be as much as 25% with an identical car and driving background. In most cases, you won't see your first age related discount until you hit age 25, after that there may be a couple smaller discounts as you get a bit older. The reason premiums drop as you age is because the older age groups have far fewer accidents than the younger groups.
The third criteria is the type of car are you driving. If your insurance company is going to have to pay to fix an expensive car or one prone to more accidents or thefts, then the premiums will be higher as well. Insurance companies base premiums on historical losses, so if you have an expensive car to fix or a popular theft target there will be higher insurance premiums. Over the past 15 years there have been many safety advances that have lead to lower death rates, but those safety features can also increase the cost of repairs. The comprehensive and collision auto insurance premiums will continue to rise as vehicles continue to be more expensive and complex to repair.
In summary, if you are more likely to cause problems and your car is expensive to fix then you will have higher insurance rates. While these 3 items are not the only factors that matter, they represent the majority of what the insurance company is concerned about. One other item that you will want to consider is getting a copy of your 3 free credit reports that the government guarantees you each year. You want to keep close tabs on your credit file as insurers are increasingly using your credit score as part of their overall risk assessment.
First and probably most crucial is you're driving record. Factors that affect insurance rates are moving violations, driving while intoxicated, or numerous fender-benders. Any combination of these and you can expect to be in a higher risk category. Most companies are coming out with good driver discounts or accident free discounts so the longer you go without tickets or accidents, the more you save.
Next your potential insurer is going to want to know your age. A young driver, whether male or female, will be charged more for insurance coverage because they are a greater risk. The difference in premium between someone age 27 and another age 17 can be as much as 25% with an identical car and driving background. In most cases, you won't see your first age related discount until you hit age 25, after that there may be a couple smaller discounts as you get a bit older. The reason premiums drop as you age is because the older age groups have far fewer accidents than the younger groups.
The third criteria is the type of car are you driving. If your insurance company is going to have to pay to fix an expensive car or one prone to more accidents or thefts, then the premiums will be higher as well. Insurance companies base premiums on historical losses, so if you have an expensive car to fix or a popular theft target there will be higher insurance premiums. Over the past 15 years there have been many safety advances that have lead to lower death rates, but those safety features can also increase the cost of repairs. The comprehensive and collision auto insurance premiums will continue to rise as vehicles continue to be more expensive and complex to repair.
In summary, if you are more likely to cause problems and your car is expensive to fix then you will have higher insurance rates. While these 3 items are not the only factors that matter, they represent the majority of what the insurance company is concerned about. One other item that you will want to consider is getting a copy of your 3 free credit reports that the government guarantees you each year. You want to keep close tabs on your credit file as insurers are increasingly using your credit score as part of their overall risk assessment.
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