Car insurance is one of those things in life that everyone needs but no one likes writing the check for. With no published pricing structure, consumers often wonder just what it is that determines the insurance premium rate that they are charged. Most of us are aware of the factors that effect our insurance rates but some might surprise you.
Age- Statistics from countless research and technical studies report that younger drivers are more likely to be involved in or cause an automobile accident than an older more experienced driver. Due to this increased risk, younger drivers are often charged up to 25% more than a more experienced driver. Their are driver training courses and other incentive based programs that can reduce the cost of insuring a young driver. If you are paying insurance premiums on a young driver, a quick call to your insurance agent to inquire about these programs may help to substantially reduce the higher premium.
Driving History – If you have been accident prone or had a few speeding tickets, your insurance carrier will consider you a higher risk than the typical driver. Someone that has a history of high risk driving behavior is likely to cost the insurance carrier more than a more conservative driver thus the higher premium rates are justified. By slowing down and behaving behind the wheel, you can keep your driving record clean and help lower the cost of your insurance.
Location of Residence – Believe it or not, where you reside or work may have an impact on your insurance premium. Insurance tends to be cheaper in rural or outer lying areas. The insurance company faces less risk when the amount of traffic that the driver encounters on a daily basis decreases. The carrier also considers a rural area to have less risk in occurrences of vandalism or car thefts.
What You Drive – The car that you drive can have a major impact on the amount of insurance you pay. Older vehicles with less value are defiantly cheaper to insure than a new top of the line sports car. Prices may vary greatly between one car model to the next. If your chosen car is considered to be a high risk for theft or is not as safe as others in the same vehicle class, your premium will be higher.
Annual Mileage – The insurance industry considers the average annual mileage to be 10,000 miles. If you have a long commute or drive more than that, a higher rate will be assessed due to an increased exposure to risk. More time spent on the road means more chances for an accident or loss to occur.
Their are ways to reduce the cost of your insurance premium and often these issues can be addressed with a simple call to your agent or insurance company. Ask about different deductibles and how they can decrease your car insurance premium. Their are also savings associated with using the same insurance carrier for your home or other insurance needs. That quick call to your agent can lead to a substantial savings.
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