What Factors Determine Car Insurance Premiums?

What Factors Determine Car Insurance Premiums?

You might be surprised to learn that your car insurance premiums differ from those of your neighbor or spouse. How is it so? Most insurance companies consider a number of factors when determining how much a client should pay in premiums. Knowing these factors will make it easier for you to plan on how you can save.

1. What you drive

Car insurers have a vehicle safety rating chart. They develop the ratings by collecting a huge amount of data from past customer claims and by considering the industry’s safety reports. Therefore, they offer discounts to clients who drive safe vehicles. The opposite applies to consumers who have flashy and dangerous rides. Vehicles that are more susceptible to occupant injury, damage and theft attract more premiums.

2. Your deductibles and policy

The insurance provider ought to factor in the additional coverage that are required in your state or those you request for. The particulars of your policy determine to a large extent what you pay every month. The general rule is that high deductibles attract lower costs. You might want to go for insurers who offer discounts to customers who use multiple products.

3. How far and how often you drive

Individuals who use their vehicles for long-distance commuting and business tend to pay more than those who are not on the road much. The more miles you drive, the higher the possibility of crashing and consequently the more car insurance you pay. Therefore, consider other alternatives such as bike riding.

4. Your driving record

Drivers who have had crashes in the past will pay more than those who have never had an accident. If you have maintained a crash-free record for a long time, hold on to your clean history and you will reap good fruits. Remain vigilant to continue paying reduced premiums. Although you cannot rewrite your history, having a crash on your record may act as a crucial reminder to drive with caution always.

Leave a Reply

Your email address will not be published. Required fields are marked *