Car insurance companies consider several different factors when calculating the cost of your car insurance premiums. While some of these factors cannot be changed, others are in your control. Below are some of the factors that will have the greatest effect on the cost of your car insurance.
One of the factors that will affect the cost of your car insurance is your location. Your insurance company will consider several statistics related to your location, including cases of vandalism, thefts, and accidents. If your area experiences more crime and accidents than other areas, you can expect to pay more for your insurance.
Different vehicles cost more to insure. In general, the more expensive your vehicle is, the more your insurance will cost. More expensive vehicles will cost more to repair or replace. Newer vehicles come with costlier insurance coverage as well.
However, safety also matters. Even though larger vehicles tend to be more expensive than smaller ones, they are also safer. Safer vehicles cost less to insure.
Gender is another uncontrollable factor that can affect your car insurance premiums. Studies have shown that men drive more miles than women and that they are more likely to get into accidents. As a result, car insurance companies charge men more for coverage.
One of the most important factors in determining the cost of your car insurance is age. Car insurance companies charge the highest premiums to teenagers, who have been shown to cause more accidents than any other age group. The next highest premiums are charged to people between the ages of 20 and 25. After you reach age 25, you will enjoy lower premiums for a while. However, many car insurance companies begin raising the cost of coverage again for elderly drivers.
Although this one may seem obvious, many drivers don’t consider the effect that their driving record will have on the future cost of insurance. When you have an accident, your premiums are likely to increase. The same is true for any tickets you may receive.
Usage of Your Vehicle
Insurance companies also consider what you use your vehicles for, and how often you use them. For example, if you use it for business, such as an outside salesperson would, you will pay more than if you simply used it to drive back and forth to work, or used it for personal use only. The number of miles you drive is also a factor. The more miles you drive, the more exposure you have to accidents.
Certain vehicle features designed to make your vehicle safer may lower the cost of your insurance premiums. Examples include security systems, lane departure alert, airbags, and antilock brakes. If your vehicle has any of these features, you may qualify for a discount.
Some of these factors, such as your age and your gender, cannot be changed. However, you can save money by changing those factors that are in your control, such as your driving record and the vehicle you purchase. In many cases, you will be able to reduce your car insurance in other ways as well. For students, getting good grades can lower can insurance rates. Likewise, people who purchase multiple policies from the same company will often pay less for their car insurance than those who are purchasing a specific policy.