Factors Affecting Your Car Insurance Premiums

There are various factors which affects a car insurance premium.

Some basic factors which would lead to increase or decrease in your car insurance premiums are as follows:

Driver’s age: The age of driver plays a very important role in deciding how much premium one has to pay. If there is a young driver and inexperienced he would be charged with a heavy premium. If on the other hand there is an experienced driver having very less penalties then he would be paying up a very low rate of premium.

Driver’s gender: Men are more prone and riskier drivers compared to female peers. As a result of which men or anybody who is at a high risk would be charged more of insurance premium, because this drivers tend to have more accidents. The more the accidents the more the insurer will have to pay. So to avoid company loosing out all money the insurer makes the more risky driver pay a higher premium.

Driver’s marital status: This may sound very biased but is true. The married drivers tend to pay less insurance then the unmarried ones. This is found from a fact that married people have some-one to look after them because of which they take care while driving especially when with their spouse. Also the major benefit this people have is they get special discounts on multiple drivers in same policy compared to unmarried ones.

Driver’s driving history: This factor is a very important in determining rates. Providers can tell a lot about how a driver operates a vehicle by checking out their driving history. The number of accidents and tickets present let one know how much safe or unsafe a driver is while driving on road. If found to be unsafe would be taken a high auto insurance premium, else low rates would be there by insurer.

Driver’s residential address: The location of driver’s home is important because it reflects how much crime rate is there in the city. If an individual belong to city where there is a high crime rate there are more chances of accident and theft. To offset the multiple claims being paid the insurance company will increase the premiums for drivers who would stay in a city where crime rates are high.

Vehicles info: The model and make of the car is very essential in determining the insurance premium amounts. If a car has higher cash value it becomes very expensive to insure it. The cash value of cars decline as they get older and becomes less expensive to insure. So if a car is new and expensive then the insurance premium on it would also be high. If a car is old one less insurance premium would be required to pay for it.

Usage of vehicle: The usage of vehicle also determines its premium. Say for example if a car is being used just as a means of transportation form home to school the insurer knows that car will be driven often and will lead to chances of it being involved in an accident more, making insurance premium payment higher. But if a car is used for leisure purposes then there are less chances of it being involved in an accident. Again the higher the risk involvement in a traffic collision higher the premium costs would be.

Annual Mileage: The annual mileage of car is also an important parameter in determining how much insurance premium one needs to pay. The mileage of driver can be figured out when the driver gets an average of the number of miles he or she has driven the car in a specific frame of year. The mileage coupled with usage gives insurer an idea the level of risk of involvement in an accident.

Type of coverage purchased: The amount of coverage a driver purchases and types of coverage purchased greatly affects driver’s rates. A driver getting insurance must make it mandatory that he carries state’s minimum requirements which will definitely reduce the chances of increasing the insurance premium. It’s very essential to figure out whether or not the policyholder is benefited from medical payments and other payments, which are not required in all states. The least amount of coverage purchased will get a cheap rate.

Taking advantage of such discounts offered by the insurer will help keep rates down.