car insurances

by mrmole

Rating factors used to determine car insurance premiums

It’s a known fact that car insurance rates vary from person to person and company to company. Many factors affect the way car insurance premiums are calculated. Though these factors are common to most car insurance companies, they weigh them differently to calculate rates for their customers.

Here’s a list of the most important ones:

Not only are different car models rated differently by insurance companies based on their safety ratings, how much they cost to repair or replace also affects car insurance premiums to a great extent. Statistical methods are used to find out data such as which cars are stolen the most, which cars are damaged the maximum in a collision, which ones have the most expensive spares, the ones with more powerful engines etc. That’s the reason compact crossovers, minivans and SUVs are the this year, while Mercedes, BMWs, Aston Martins and Pontiacs are among the most expensive ones to insure.

Every driver that is added to a car insurance policy is naturally going to contribute to higher rates. The previous driving record of a driver indicates to the car insurance company whether s/he is a high or low risk proposition. Too many tickets, especially of moving violations, escalate car insurance premiums while clean driving records are encouraged with discounts and lower deductibles. So, if you’ve been in any accidents in the past, it is bound to affect your car insurance premiums.

Urban areas have a greater density of traffic and are bound to attract higher car insurance premium rates. Areas which show higher incidence of theft, riots, accidents and uninsured drivers are also going to have higher rates. That’s why is higher than OH. Also different state laws demand different coverage options and these have a direct bearing on car insurance premiums.

While women get into minor accidents, men get into more serious ones, so men pay higher car insurance premiums. Mature men aged 45-65 pay the lowest rates while younger drivers, especially teens pay the highest car insurance premiums; so experience behind the wheel does matter!

Based on statistical analysis, insurance companies rate married people as mature and responsible drivers. Single people are considered to be more risky propositions as they have less to lose, so their car insurance premiums are higher.

Simple logic; if you have more money in your bank account and pay your loans on time, you will pay your car insurance premiums on time too! Those with a good credit history are bound to be less tempted to make claims against their car insurance companies, costing them less as customers, hence they pay lower car insurance premiums.

A good grade in high school can get credits and discount on your car insurance premiums. Also a “safe” occupation like that of a teacher shows you as lower risk proposition and so your rates are lower. If you have consistent employment history, you come across as a more stable and responsible individual with a regular source of income to the car insurance company and so are charged lower rates.

Since a first time driver lacks road experience, the rates are bound to be higher. Also, the insurance company has no access to your driving record, so they don’t have any clue what kind of driver you could turn out to be. Insuring you is a huge risk they are taking. This makes your car insurance premiums high! Also, the car insurance coverages you were carrying previously, if any, show the prospective new company whether you buy minimum coverage just to be legal or are a serious customer!

Whether your car is used for business, pleasure or commuting, where it’s going to be parked for most of the day, is it going to be driven through crowded areas etc., affect the calculation of your car insurance premiums. If the car is being driven for late night parties regularly for example, you can expect to pay higher rates.

This one is obvious! The more coverage you add to your car insurance policy, the more money you pay, as you are transferring more risk to your car insurance company. However it’s better to buy good coverage options for adequate protection. Rates can always be lowered by keeping higher deductable options. Also shopping for can save you money; however ensure you check the financial stability and claim handling reputation of the car insurance company that you go with.

While some factors that affect your car insurance premiums like your age, location, number of drivers might not be in your hands, others like your credit and driving history, how you use the car, where you park it, are things you can work around to get lower car insurance premiums. Good luck!

Find More Car Insurances Articles

{ 0 comments }