7 Factors that Can Affect Your Car Insurance Premium

As a car owner, it is mandatory in most cities that you possess car insurance in order to protect you from certain damages, as well as any other driver involved in such situations. However, there are several factors that could affect your car insurance premium, either by increasing or reducing your insurance rates.

The car insurance premium you end up purchasing may be affected by some of the following:

  1. Car Type: Due to the different types of cars being made, some can be more expensive to insure than others, especially cars deemed to be of higher risk. For example, if you install security features like anti-theft devices, antilock brakes, and so on in your car, there is a possibility that you are given discounts on your premium.

  2. Driving Dexterity: Your driving skill is another important factor that could affect your car insurance premium, in the sense that multiple accidents on your driving record can cause an increase in your car insurance cost. It is also possible that you are charged more for insurance if you are a new driver who has never gotten insurance. This occurs because you might be seen as inexperienced. However, using your car on more occasions than the average driver can also cause an increase in your insurance cost. That’s because driving more miles is perceived as a high probability risk exposure.

  3. Location: Not everyone is lucky enough to live in the best side of town. Unfortunately, for persons who live in areas where they are prone to theft, vandalism, bad roads prone to accidents, etc., the cost of car insurance premium might be higher than those who live in more peaceful and low-risk areas.

  4. Age: As mentioned before, if a driver is considered inexperienced, the insurance premium cost automatically becomes higher. This is often a disadvantage to younger drivers who have just gotten their license and are driving for the first time.

  5. Coverage: There are several coverages for car insurance premiums, each with its own different protection benefits. That is why you should consider the type of coverage you choose, as it may affect the cost of your insurance premium. Apart from the typical coverages available for car insurance, you can also add optional protections to your insurance.

  6. Deductibles: Your deductibles, which is the sum of money you pay towards your insured loss, can also affect your car insurance premiums in the sense that the higher your deductibles, the lesser you have to pay for your insurance policy.

  7. Limits: The coverage you choose in your policy goes a long way in determining your limits, which is the maximum amount your policy will pay toward a covered loss. Since it is possible that you might need more than one or two coverages to increase your limits, the cost of your car insurance premium is likely to increase if you do purchase several coverages.

In order to familiarize yourself with other factors that might affect your car insurance premiums in accordance with your policy, it is important that you keep in contact with your insurance agent, ask the necessary questions, and review your policy periodically to incorporate any changes that may be necessary. If you have any questions, our team of insurance experts at Family Financial Insurance Group will assist you.

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